Netflix lost nearly 1 million subscribers last quarter

Netflix warned it might lose more subscribers in the second quarter of this year than it did in the first, and that prediction has come true — though it wasn’t as bad as feared. The streaming service said it lost nearly 1 million subscribers (970,000 to be exact) in Q2. That’s far more than the 200,000-member decline from Q1, but not as bleak as the 2 million Netflix was prepared to part with.

The company attributed the slightly rosier outcome to “better-than-expected” subscriber growth, particularly in areas like Asia-Pacific. The company still turned a $1.44 billion net profit despite the shrinking customer base and unfavorable foreign exchange values for the US dollar. Unfriendly exchange rates are a particularly difficult problem when nearly 60 percent of revenue comes from outside the country, Netflix said.

The media giant is expecting a turnaround for the third quarter, if a slow one. It’s now predicting that it will add a net 1 million subscribers. While that’s a far cry from the 4.4 million Netflix added a year earlier, it’s a decided improvement over the past six months. The strong start for Stranger Things 4 could help — the nostalgic show is now Netflix’s most watched season of English TV to date with over 1.3 billion hours of viewing.

Netflix’s recovery plan will sound familiar. The company is still pinning its hopes on a lower-priced ad-supported tier due in early 2023, and expects to launch it in a “handful of markets” where there’s already strong ad spending. The service also plans to fight account sharing, and is experimenting with ideas that include charging for additional homes. The finished sharing system could also roll out in 2023.