Netflix has long been the leading internet television network. Since it launched its online streaming service in 2007, it has garnered more than 81 million members across 190 countries, with 125 million hours of TV shows and movies per day, including original series, documentaries and feature films.
However, the company’s latest financial results suggest TV audiences are losing interest and starting to switch off. In a letter to its shareholders, Netflix reported the addition of 160,000 new US subscribers from April through June.
While that sounds pretty positive, it is the lowest quarterly gain in US customers reported since Netflix split its video-streaming and DVD-by-mail services five years ago. Netflix revenue also missed expectations of $2.1billion, coming in at $1.96bn.
Perhaps Netflix isn't upgrading its choice of content often enough to retain interest? Or have people become privy to account sharing on a mass scale? The slow growth has also been blamed on the site recently increasing its prices.
"We are growing, but not as fast as we would like or have been," the company continued in the letter. “Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business."
But Netflix was adamant that the drop in membership and lower-than-expected earnings wasn’t anything to do with competing services such as Amazon Prime Video, Hulu and YouTube Red.
"As internet TV rises in popularity, so do the Subscription Video on Demand (SVOD) offerings. In the US, for example, CBS All Access, Seeso, Amazon Prime Video, Hulu, YouTube Red, and many others are all growing.
"Our view, however, is that we are all growing primarily against linear TV hours and that competition did not contribute materially to our miss in Q2."
Netflix is so sure of this, it said increased competition would show up mostly in soft gross additions rather than churn.
"Second, we experienced a similar uptick in churn in early April in Canada, where there has been no recent increase in SVOD competition but where ungrandfathering is also underway," the firm added.
"Similarly, we don't believe market saturation is a key factor in the US given that we experienced similar performance over the same period in multiple countries with differing levels of Netflix market penetration."
Regardless of this latest earnings report, Netflix is trying new ways to engage increasingly tech-savvy audiences.
As part of Netflix's latest hack day, the streaming company's design team created a VR showroom that users can stroll around thanks to HTC Vive's room-scale VR. Called 'The Netflix Zone' - with a font that nods to a certain classic TV show - the hack was put together by just three developers; Joey Cato, Marco Caldeira, and Adnan Abbas.
In the zone, familiar Netflix movie categories are reimagined as different shelf racks, including ones for personal recommendations. Titles such as Orange is the New Black and House of Cards sit on shelves in the form of VHS cassettes. In a nice bit of attention to detail, if they're picked up and rotated with the Vive's controllers, the familiar tape spools are built into the back of each object.
This article was originally published by WIRED UK
