Netflix Loses Record 1 Million Subscribers

Should Netflix finally turn to live sports?

Nearly one million subscribers canceled their Netflix membership during the last three months.

The good news is the drop is lower than initially anticipated. Netflix had braced for a decline of around 2 million subscribers.

CEO Reed Hastings credits two series for Netflix holding on to more subscribers than expected.

"If there was a single thing, we might say "Stranger Things,'" Hastings said. "But again, we are talking about losing 1 million instead of losing 2 million."

The bad news is that a loss of 1 million customers is the largest since its foundation 25 years ago.

Stranger Things, particularly, saved the fall at Netflix. Stranger Things 4 is the most popular English-language series on Netflix to date, breaking several first-week records.

Yet, Netflix can't rely on Stranger Things to curb steep declines moving forward. There is only one season left, and it could be two years from release.

While Netflix is exploring ST spinoffs, prequel series often fail to capture the widespread popularity of an original series. Namely, Better Call Saul is a worthy successor to Breaking Bad yet has struggled to maintain a large audience.

Issues at Netflix expand wide, from password sharing to increased competition. Netflix used to bank on its extensive library of legacy connect. However, studios have since pulled their content from Netflix to launch in-house competitors. Examples include Peacock, Disney+, Hulu, and Paramount+.

This year, Netflix has laid off over 450 employees amid rapid stock declines. Company shares traded at just $200 as Wall Street closed on Tuesday. At this time last year, Netflix shares traded for approximately $700.

Interestingly, Netflix maintains a reluctance to show interest in live sports, the most valuable entertainment property. Its competitors -- Amazon Prime Video, ESPN+, AppleTV+, Peacock, and Paramount+ -- are all investing heavily into sports content for the future.

But if subscribers continue to cancel the service, Netflix could reevaluate its approach to live sports. The company is already going off a script by creating an ad-supported subscription plan, which it previously said it would never do.

The streamer recently teamed with Microsoft to create the tier, with an early 2023 launch date in mind.

"We're confident and optimistic about the future," Netflix concludes.

Wishful or confident?