Netflix’s Domestic Crisis

For years, Netflix projected it could acquire 90 million subscribers in the U.S.—and that international growth would follow a familiar hockey-stick path. But subscriber losses in its most mature, valuable market also foreshadow future impediments to Netflix’s TAM: What happens when the competition heats up there, too?

Netflix co-C.E.O. Reed Hastings. Photo: Felipe Caicedo/Getty Images

Julia Alexander

July 21, 2022

Netflix lost 970,000 subscribers and Wall Street cheered. That’s the crux of every headline that has followed the company’s not-as-spooky-as-feared earnings report from Tuesday, one encapsulated by co-C.E.O. Reed Hastings’ pitiable “less bad” verdict. But that superficial narrative belies a more fascinating story occurring on a more granular level. Netflix lost 1.3 million subscribers during the quarter in the U.S. and Canada (UCAN). This is the second quarter in a row of substantial subscriber loss in Netflix’s most penetrated, highest revenue per user and substantial market.