Netflix CEO Reed Hastings blames price hikes & lack of original content for slower than expected growth in Q2 2019

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Netflix’s Chairman and CEO Reed Hastings is looking within the company for what’s caused the growth slowdown for the second quarter of 2019. It only gained 2.7 million global subscribers, after it projected that it would add five million. And for the first time since 2011, when the company separated its DVD mail-order system and its streaming platform, Netflix saw a loss in US subscribers. It lost around 130,000 users. Hastings believes this happened because of the price hikes and lack of original content that came out in this cycle. At the start of the year, Netflix instituted higher pricing plans in some areas, which affected both new and returning subscribers.

Hastings wrote in his letter to shareholders, “We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions.” The CEO expressed his confidence that the next two quarters will see growth with the return of Netflix hits like Stranger Things, The Crown, and Orange is the New Black. But we’d also want to see what effect its competition will have once services from Disney, Apple, NBC, and Warner Media hit the market later this year. Netflix will need to continue to pump out compelling content to keep its subscribers. But one thing it has over its competition is the focus on excelling in territories where the competition isn’t competing with it. As The Verge points out, this is where the majority of the company’s growth has been coming from.