Netflix has lost nearly a million subscribers this quarter as the tumbling user count continues for the streaming giant.
Announcing its second quarter results, the company said subscribers dipped by 970,000 April through June.
The good news for Netflix was that the fall wasn’t as deep as first predicted back in April, and shares jumped as much as eight per cent following the news.
Netflix estimated new customer additions for July through September would amount to one million, below Wall Street expectations of 1.84 million.
However, investors have reacted more positively this evening after the first bleak outlook back in April, when subscribers were down 200,000.
Not only did this cause the share price to plunge, wiping $40bn off its market value, but it has also put immense pressure on the company’s strategy.
Last week Netflix announced a fresh partnership with Microsoft to introduce a “lower priced ad-supported subscription plan” to drive down prices and act as an “addition” to the existing plans.
The company’s chief operating officer Greg Peters said that the long-term goal was clear for Netflix: “More choice for consumers and a premium, better-than-linear TV brand experience for advertisers”.
Netflix also confirmed reports that it would start charging users extra if they use accounts at multiple locations as the firm cracks down on password sharing.
The US streaming giant will ask viewers to pay an additional charge if the account is used in more than one “home”, requiring people to scan devices to track account activity.
For any account usage, users will need to fork out $2.99 for new users and adds to the growing set of action taken by the company to claw back user growth.
However, TMT analyst at PP Foresight Paolo Pescatore warned against any major changes.
He said: “Cracking advertising is no feat as subscribers have been accustomed to an ad free service. While this is all about attracting new sign-ups. Netflix needs to tread carefully not to cannibalise its own base, while working closely with brands to serve relevant ads.
This is all based on Netflix taking a more open approach to the wealth of data its has built on customer behavioural patterns.”