Netflix Q3 Results in Loss of 810,00 Subscribers, Not as Bad as Expected
At this point everyone knows all the different ways that Netflix has stumbled recently. Between price hikes and the ill-conceived Qwikster launch and cancellation, there was no doubt that Netflix was going to lose some subscribers. The only question was how many. At one point Netflix had warned investors that they could lose about one million subscribers as a result of the price increase and some had even thrown out numbers as high as 3 million. Kind of makes the 810,000 lost subscribers that Reed Hastings announced in Netflix’s Q3 results seem like good news. Now the question is whether Netflix can follow up on its guidance to stem the flow and start reversing the churn trend in Q4.
The problem for Netflix isn’t so much the quarter that it just posted but rather the guidance the company has provided for the future. Netflix said it would dramatically increase its costs in order to shore up the services through content acquisitions and by expanding into new markets, such as Latin America. As a result, its next quarter guidance is lower than was previously expected.