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In this Q1, they lost 700k subscribers in Russia. Without that they would have had positive growth. From shareholder letter PDF: https://s22.q4cdn.com/95985316

by AnssiH 4y ago

In this Q1, they lost 700k subscribers in Russia. Without that they would have had positive growth. From shareholder letter PDF: https://s22.q4cdn.com/959853165/files/doc_financials/2022/q1/FINAL-Q1-22-Shareholder-Letter.pdf https://s22.q4cdn.com/959853165/files/doc_financials/2022/q1... > The suspension of our service in Russia and winding-down of all Russian paid memberships resulted in a -0.7m impact on paid net adds; excluding this impact, paid net additions totaled +0.5m.

scarab92 4y ago
Yes, but they forecast growth of 2.5m and analysts were expecting 2.7m - 3.0m, so 200k is still a big miss, albeit only a single data point at this stage.
- colburnmh 4y ago
  True, but it's an enormous miss. If they missed the projections by a few hundred thousand, there wouldn't be as much of a panic. But they only got 8%-11% of the subscriber growth they projected, depending on whether you account for the Russian business wind-down--that's not a trivial miss. And as others have pointed out, part of the problem that companies like Netflix are going to encounter is the result of the long-running erosion of worker pay (while corporations have had years of record profits), coupled with sudden and rapidly rising inflation. This is going to cause a serious lack of available cash for households to spend on anything that isn't critical--like 37 different streaming services. The first part, Netflix can't do anything about other than ensure that they pay their workers fairly. But streaming has been an area of increasing specialization, rather than service consolidation. And that causes problems for Netflix as they continue to lose portions of their catalogue to others like Disney, Hulu, Apple, etc., as they start their own services. Users are either going to just cancel, or will start "service hopping" (where they pay for one service for a month, cancel/suspend that service, then go to another) to be able to watch the shows they want. And that will represent a significant revenue loss to the entire segment, and ultimately force contraction.

by AnssiH 4y ago

scarab92 4y ago

Yes, but they forecast growth of 2.5m and analysts were expecting 2.7m - 3.0m, so 200k is still a big miss, albeit only a single data point at this stage.

colburnmh 4y ago
True, but it's an enormous miss. If they missed the projections by a few hundred thousand, there wouldn't be as much of a panic. But they only got 8%-11% of the subscriber growth they projected, depending on whether you account for the Russian business wind-down--that's not a trivial miss. And as others have pointed out, part of the problem that companies like Netflix are going to encounter is the result of the long-running erosion of worker pay (while corporations have had years of record profits), coupled with sudden and rapidly rising inflation. This is going to cause a serious lack of available cash for households to spend on anything that isn't critical--like 37 different streaming services. The first part, Netflix can't do anything about other than ensure that they pay their workers fairly. But streaming has been an area of increasing specialization, rather than service consolidation. And that causes problems for Netflix as they continue to lose portions of their catalogue to others like Disney, Hulu, Apple, etc., as they start their own services. Users are either going to just cancel, or will start "service hopping" (where they pay for one service for a month, cancel/suspend that service, then go to another) to be able to watch the shows they want. And that will represent a significant revenue loss to the entire segment, and ultimately force contraction.