Netflix Stock Plunges Amid Subscriber Target Failure
Netflix had a disappointing start to their week. Almost as bad as their short-lived series Marco Polo. Almost. Thanks to a series of predictable events, Netflix missed its target for new subscribers, causing investors pause.
The video streaming company’s stuck plunged more than 10 percent Tuesday morning after Netflix’s latest earnings numbers fell short of Wall Street’s expectations for subscriber growth.
The streaming giant, which had previously had five quarters of meeting or exceeding analyst expectations, announced Monday afternoon that it had added just 670,000 subscribers in the United States. That was compared to the 1.2 million many analysts predicted in the second quarter, and 4.5 million overseas subscribers instead of the 5.1 million projected.
Yikes. It's like showing up for a blind date thinking you'll get Gal Gadot, only to see Stephoknee. She's smiling at you from across a dark room of candles and regret. The smell of man flesh in the air. From the looks of it, she's been nom-nomming the Oreos, waiting for you to arrive. Floss on aisle no thanks.
The cause of Netflix's slump is likely multifaceted. Competition in the marketplace from Disney, HBO and other streaming services like Hulu, Amazon and YouTube. As well as natural subscriber drop-off: the theory that everyone who will subscribe with Netflix already has.
Then there are the unmentioned causes for Netflix's graphical flatline: their decisions. I personally canceled my Netflix subscription months ago when I found the content selection left me empty. Like carbs, but without the delicious first pass. Then there's been the Netflix staffing. Netflix has added some members of Obama's cabinet to their executive lineup, including Benghazi lie-teller, Susan Rice. The Obamas also penned a sweet little content deal with Netflix. From reading the Facebook comments alone, I know plenty of conservatives have cut ties with the streaming service, citing "but Obama." Usually "Obummer." Netflix is free to hire whomever they'd like. Users are free to find their executive choices displeasing, then spend their money elsewhere.
When we boil this story down to its essence, the marketplace is just working as it should. Competition is creating more user-options. These competing streaming services will seek to boost the quality of their content, and probably lower their prices, in an effort to lure you, the consumer, to their platform. So while this maybe a slight loss for Netflix, it ultimately benefits you. That's the way the capitalist cookie crumbles in your cafe latte.