Streaming behemoth Netflix announced their reported earnings last Wednesday, only to have business analysts decree that the numbers are nothing short of “disastrous.” According to The Verge, the company reported a loss in subscribers in the United States for the first time in eight years. It also failed to hit the number of international subscribers projected, gaining just 2.7 million — half of what was forecasted.
The dismal numbers caused Netflix’s stock price to plummet by more than 10 percent, losing the company a total of around $17 billion. Many believe that the recent rate hikes are to blame for the streaming giant’s misfortunes. In the spring, Netflix implemented higher fees, so that a basic plan went from $8 to $9 per month, the most popular standard plan went from $11 to $13, and the premium plan increased to $16 from $14.
Another difficulty facing Netflix is the rise in competitors. Amazon Prime and Hulu have become players in the streaming game — both creating original hits like Jack Ryan and The Handmaid’s Tale, respectively. Moreover, the number of streaming companies is only growing, with Apple and Disney also slated to launch their own platforms later this year.
Though Netflix has had a number of hits like the third season of Stranger Things and Jennifer Aniston movie Murder Mystery, it does not seem to have the same cultural clout as it once did. Also, it is slated to lose streaming rights to The Office and Friends next year. The two cult television shows are Netflix’s first and second most popular streaming options, respectively.
However, Netflix has insisted that it does have bright prospects.
“There are about 700 million households that pay for TV outside of China — the equivalent of the US hundred million — and that’s one established market,” said Netflix CEO Reed Hastings during an investors call Wednesday night.
“Do we have enough content in each of those countries? The internet is capable of some very large customer bases.”
Particularly important in Netflix’s international push is engagement with India. The country, which has a population of over 1.3 billion, is largely considered an unsaturated market, and Netflix hopes that its five new original shows for the Indian market will catch hold.
“We’ve been seeing nice, steady increases and engagement with our Indian viewers that we think we can keep building on,” added Chief Content Officer Ted Sarandos. “Growth in that country is a marathon. We’re in it for the long haul.”
Netflix is also set to spend $15 billion next year on original content, in a bid to keep and gain new subscribers.