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For the first time since 2011, Netflix lost subscribers

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Netflix lost subscribers

On Wednesday, Netflix revealed its slowest growth period to date in a 2019 quarterly earnings report.

In the streaming service’s second fiscal quarter, from April to June, Netflix’s overall paid memberships grew by 2.7 million, which may sound like a lot, but that figure is less than half of the 5.5 million users the company drew in this time last year.

For the first time since 2011, the worldwide streaming giant saw a loss in paid subscribers, with a decrease of around 130,000 individual accounts, as reported by the Hollywood Reporter.

As a result of the drop, shares in the company fell by 11 per cent in pre-market trading on Thursday morning.

WATCH: Netflix stocks plunge




Though there may not be one single reason for the unexpected drop, there are a number of plausible factors contributing to the subscription slump.

A number of Netflix users credit this slow growth period to the company’s sporadic price increases, while others believe it is related to the quantity and quality of the service’s original content.

Here’s what some Netflix users had to say on Twitter:

When asked what Netflix believes was responsible for the lack of subscription growth, the company provided an official statement to Global News, saying: “Our missed forecast was across all regions but slightly more so in regions with price increases.”

Other subscribers believed the threat of competitor streaming services might have played a part in the unexpected decline.

Netflix has always had competitors, including STACKTV, Crave, HBO, Hulu, Amazon Prime and the upcoming Disney+ streaming service.

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The company, however, does not believe competition played a part in the subscription decline.

The statement continued: “We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during [the second quarter of the fiscal year], and competitive intensity and our penetration is varied across regions (while our over-forecast was in every region).”

The streaming giant maintained that it beat its subscriber growth forecast in the last quarter and that subscription numbers are not, as reported, “steadily declining.”

“We think [the second quarter of the fiscal year’s] content slate drove less growth in paid net adds than we anticipated,” the company wrote, referring to Netflix’s releases between April and June, which included Adam Sandler’s Murder Mystery and Ali Wong’s Always Be My Maybe.

The streaming service added that while both original feature-length films were extremely popular, for the most part, they did not prompt new users to subscribe.

Netflix logo is reflected on a woman’s eyeglasses in Ankara, Turkey on Nov. 27, 2018.

Netflix logo is reflected on a woman’s eyeglasses in Ankara, Turkey on Nov. 27, 2018.

Ercin Top/Anadolu Agency/Getty Images

“[The first quarter of the fiscal year] was so large for us (9.6m net adds) that there may have been more pull-forward effect than we realized,” the company noted.

In its quarterly earnings report, Netflix’s statistics were largely focused on U.S. or worldwide data. The company told Global News it doesn’t give out specific subscriber numbers for Canada.

In its recently started third quarter, Netflix has anticipated up to seven million subscribers as opposed to the six million achieved in 2018.

Thanks to the third season of the critically acclaimed Stranger Things, it’s possible the company will see growth again in 2019. Stranger Things was released on July 4.

Additionally, Netflix will add the third season of The Crown as well as the highly anticipated final season of Orange Is the New Black to its television roster. Both are widely popular shows.

WATCH: Cary Elwes, Dacre Montgomery talk ‘Stranger Things’ Season 3




In its statement, Netflix concluded: “In prior quarters with over-forecasts, we’ve found that the underlying long-term growth was not affected and staying focused on the fundamentals of our business served us well.”

As of this writing, Netflix has more than 151 million paid subscribers.

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Hudson’s Bay Company agrees to taken company private

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Hudson’s Bay Co. will go private in a deal valuing the Canadian retailer at $1.9 billion in a bid by a group of investors led by executive chairman Richard Baker to try their hand at reinvigorating the fading 349-year-old department-store chain.


Hudson Bay Company executive chairman Richard Baker

The board of Hudson’s Bay said it entered into an agreement with investors led by Baker after the group raised its offer price to $10.30 a share, up from $9.45 a share. It approved the offer after a recommendation by a committee of independent directors.

Hudson’s Bay shares rose 7 per cent to $10.11 at 9:35 a.m. in Toronto.

Attention will now turn to minority shareholders who came out against Baker’s earlier proposal. The company needs a majority of them to approve the new deal for it to go through.

Catalyst Capital Group and other investors had said Baker’s original offer undervalued a company that’s rich in real estate holdings. Representatives for Catalyst and for Jonathan Litt, an activist investor who’s also been critical of Baker, were not immediately available for comment.

“The special committee is confident that this transaction represents the best path forward for HBC and the minority shareholders,” David Leith, head of the special committee, said in a statement.

Baker and his investment group want full control of the retailer, which also owns Sak’s Fifth Avenue, to turn the business around outside the glare of public markets. While Saks has been the group’s bright star of late, the Canada-based Hudson’s Bay chain, the oldest company in North America, is removing 300 “unproductive” brands and bringing in another 100 in a turnaround effort.


Mannequins sit on display inside a Saks Fifth Avenue.

Daniel Acker/Bloomberg News

A number of traditional retailers are struggling and closing stores as consumer preferences change and shoppers increasingly migrate online to competitors like Amazon.com Inc.

Department stores in particular have struggled to attract new consumers and maintain sales.

Luxury focused chains haven’t been exempt from the fallout: Barneys New York Inc. filed for bankruptcy protection in August amid rising rent costs and a decline in visitors. A consortium led by Authentic Brands Group LLC has been selected as its initial bidder, with the group planning to open Barneys shops inside Saks Fifth Avenue stores owned by Hudson’s Bay, Bloomberg reported on Oct. 16, citing people with knowledge of the matter.

Hudson’s Bay has been trying everything to lower debt and stop its stock’s slide, most recently selling selling the operations of its Lord & Taylor department store chain to clothing rental subscription company Le Tote.

Chief executive Helena Foulkes, who was brought in last year, also sold flash-sale e-commerce site Gilt and cashed out of European operations.

The stock traded as high as $10.72 in August on expectations the bid would be raised. It was back at $9.45, the original offer price, at the end of last week. Over the last five years, the stock has lost about half of its value.

“It’s good to see that there’s a resolution with a good, formal take-private offer and a cash bid, and I think that should be a good resolution for a lot of people,” Greg Taylor, chief investment officer at Purpose Investments, said on BNN Bloomberg.

“Certainly a lot of people would have wanted a lot more from this but in the current dynamics around department stores in North America, I think this is probably as good as they could have hoped.”

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Energy regulator says crude-by-rail shipments fell to 310000 bpd

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The Canada Energy Regulator says exports of crude oil by rail from Canada fell slightly in August to 310,000 barrels per day from 313,000 bpd in July.

The August number is up 35 per cent from 230,000 bpd reported in August of 2018 but still well below the record high of 354,000 bpd set last December.

The small change in crude-by-rail shipments came despite a threat by Imperial Oil Ltd. CEO Rich Kruger to throttle back the company’s rail movements in August and September to protest the ongoing Alberta oil production curtailment program.

He says the program damages the economic case for crude-by-rail by artificially lowering the difference in oil prices between Alberta and the end market on the U.S. Gulf Coast.

Imperial reported moving 80,000 bpd by rail in June. It co-owns an oil shipping rail terminal at Edmonton with capacity to load 210,000 barrels of crude per day.

Alberta has gradually eased the curtailment program designed to better align production with tight pipeline capacity from an initial withholding of about 325,000 bpd last January to 125,000 bpd in September.

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Hudson Bay Company agrees to pay more to shareholders for takeover bid

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Hudson Bay Company

The board of Hudson Bay Co. has agreed to a sweetened offer by a shareholder group led by executive chairman Richard Baker.

The retailer says the group has agreed to pay $10.30 per share in cash to take HBC private. The bid is up from an earlier offer of $9.45 per share.

The agreement values HBC at about $1.9 billion.

HBC says the price offered represents a premium of 62 per cent compared with where its shares were trading before the shareholder group’s initial privatization proposal in the summer.

The Baker-led group holds a 57 per cent stake in the retailer and includes Rhone Capital, WeWork Property Advisors, Hanover Investments (Luxembourg) and Abrams Capital Management.

The deal is subject to the approval by a majority of the minority of HBC shareholders, excluding the shareholder group and its affiliates, and approval by a 75 per cent majority vote at a special meeting of shareholders.

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