(CelebrityAccess) — Streaming video on-demand service Netflix reported slowing subscriber growth in the second quarter of 2019.
In its quarterly financial filing, Netflix revealed that it saw a net loss of subscribers in North America for the first time since 2011, ending the quarter with 126,000 fewer subscribers in the market.
Overall, Netflix actually added 2.83 million new subscribers worldwide but missed its subscriber growth projections which had previously estimated the company would add 5 million new users for the quarter.
“Our missed forecast was across all regions, but slightly more so in regions with price increases. We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions,” CEO Reed Hastings said in a letter to investors.
The loss of subscribers comes as Netflix, which has been a dominant player in the VOD streaming business, faces challenges on multiple fronts. In the last few months, Netflix has lost some of its most popular content, with shows such as “Friends” and “The Office” leaving the platform, combined with a slowing of its own original content offerings for the quarter.
Netflix is also facing increased competition as multiple tech companies and content creators such as Apple, and Disney are preparing to launch their own streaming services.
At the same time, Netflix reported that revenue for the quarter improved year-over-year from $3.9 billion in 2018 to $4.92 billion in 2019. Operating income improved from $462 million to $706 million for Q2 2019, but net income sagged, slipping from $384 million to $270 million for Q2 2019.
Despite the mixed results, Netflix projected big things for Q3, noting the quarter started out with a bang behind the debut of the streamer’s hit series “Stranger Things.”
“In addition to the recently released season 3 of Stranger Things, our second half content slate includes new seasons of La Casa de Papel (Money Heist), The Crown, and the final season of the iconic Orange is the New Black as well as big films like The Irishman from Martin Scorsese and action movie 6 Underground (directed by Michael Bay and starring Ryan Reynolds),” Netflix said in its earnings statement.
“While our US paid membership was essentially flat in Q2, we expect it to return to more typical growth in Q3, and are seeing that in these early weeks of Q3. We forecast Q3 global paid net adds of 7.0m, up vs. 6.1m in Q3’18, with 0.8m in the US and 6.2m internationally. Our internal forecast still currently calls for annual global paid net adds to be up year over year. There’s no change to our 13% operating margin target for FY19, up 300 basis points year over year,” the company added.