Netflix Confronts Problem of Slowing Subscriber Growth; What Is the Solution Now?

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Netflix has been hailed by many as the world’s largest streaming service but is set to face tough times in the upcoming days. The company which was once forecasted to change the television platform forever is facing a concerning drop in subscriber growth. Even before it has confronted the threats of Apple and Walt Disney, which are being termed as high-power threats, things seem rather dull for Netflix.

The latest sign suggesting that the streaming giant is facing challenges emerged on Wednesday when the company released its third-quarter results. The numbers provided are sheer indications that the honeymoon period of Netflix is on the verge of ending in the United States, where the target audience expansion is increasingly reducing due to most customers already having the service.

Netflix said the company expects to add 7.6 million more subscribers from across the world in the last quarter, which is a dip from the 8.8 million customers it added to its foray in the same period last year.

Netflix had advised in its third-quarter letter that “The launch of these new services will be noisy” and warned about some modest headwind to its near-term growth. E marketer Eric Haggstrom analyst believes that the fourth quarter of the year has challenges which are a tad a bit different from everything the company has faced earlier. In the third quarter of the year from July to September, Netflix added only 6.8 million customers worldwide which was down from the projected target of 7 million customers done by the Los Gatos, California based company.

The management had anticipated that the company would be picking up close to 800,000 customers in the third quarter in the United States, but they got only a paltry 520,000 which was way below the expected target. Netflix lost around 123,000 customers in the April-June period, a first of its kind in eight years, and this hit the company hard. They haven’t been able to recover as of now.

Netflix CEO Reed Hastings admitted that it was the price increase in the US which was brought into effect this year, which has definitely impacted the slowdown.

“There is a little more sensitivity, we are starting to see a little touch of that,” Hastings said during one of the discussions about the third quarter. “What we have to do is just really focus on the service quality, make us must-have,” he added.

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