Netflix's two biggest original series ever, Ozark and Stranger Things, debuted their highly anticipated new seasons in the second quarter. The final two episodes of Stranger Things season 4 just landed on Netflix a few days ago. In the first 28 days after the show premiered on May 27, Netflix account owners streamed nearly 1.2 billion hours.
Both dramas set ratings records, which is obviously good news for Netflix. Because since entering the second quarter, the streaming company predicts that it will lose 2 million users, which is a jaw-dropping number. To get out of this mess, Netflix launched an ad-supported subscription and cracked down on Netflix password sharing. Meanwhile, this week, ahead of the company's next-quarter earnings release later this month, analysts predicted that subscriber declines would be less severe.
In fact, the number of people canceling their Netflix accounts may be worse than initially estimated.
More people canceled Netflix accounts than expected
It is reported that in this quarter, Netflix launched two seasons of the most anticipated TV for the first time to keep viewers binge-watching.
Barclays' forecast released on Wednesday local time believes that Netflix will lose not 2 million but 2.8 million users in the second quarter (the company will release earnings report on July 19).
Barclays analyst Kannan Venkateshwar appears to have based his prediction in part on two things: first, a decline in Netflix app downloads; and second, a decline in Netflix's general engagement numbers. Additionally, Venkateshwar raised issues of quantity versus quality, which appear to be driving Netflix account cancellations. The
Barclays analysis report continued: "In our view, Netflix may need to rebalance its content portfolio to tilt more towards quality, especially given the competing products of Disney, Apple, HBO and Amazon." In fact, , in the second half of 2022, Netflix’s streaming competitors are significantly improving their quality. For example, HBO has a "Game of Thrones" prequel ("House of the Dragon") that will be broadcast in August. Amazon's "Lord of the Rings" series "The Rings of Power" will be broadcast on September 2.
Does Netflix produce too much crap?
In Barclay's pessimistic view, things will be even worse for Netflix in 2023. Many users will abandon their Netflix accounts, and the investment bank believes the streaming company's performance next year will hit the low end of its guidance. Analysts believe that even this forecast may be too optimistic. Part of that is because Netflix needs investment to continue building out its ad tier and gaming business.
Still, Netflix will continue to make some big moves this year -- in an effort to maintain and grow the number of Netflix accounts it currently has to the greatest extent possible. One example is The Gray Man, a big-budget spy thriller starring Chris Evans, Ryan Gosling and Ana de Arma.
The film, which will hit Netflix later this month, cost $200 million to make. It's helmed by The Avengers' Russo brothers, and there's every indication that it's going to be a hit.
However, Netflix has reportedly blocked reviews of The Man of Gray Shadows - and will do so until the last second next week.
