Hacker News Reader

Comment by beloch | Hacker News Reader

They've lost 200K subscribes... so far.

The full effect of price increases will take time to fully play out, plus the effects of implementing commercials have yet to be seen. Also, it remains to be seen how other streaming services will respond. Will they raise prices and add commercials too?

If Netflix becomes the one streaming brand most associated with actions hostile to their viewers, this could be the beginning of a long decline.

View on HN

This 200k subscribers number is missing the elephant in the room. They expected 2.5 million new subscribers. They didn't get those 2.5 million new subscribers and actually lost 200k, so they're technically -2.7 million subscribers.

This may have also triggered an exodus of subscribers too, even if Netflix doesn't do anything additionally stupid to turnoff consumers.

I know it’s commonly used logic, because announcements and expectations and whatnot, but I find the logic of:

> They didn't get those 2.5 million new subscribers and actually lost 200k, so they're technically -2.7 million subscribers

To be extremely questionable, if not outright incorrect. They didn’t lose something they didn’t have. 2.5m people didn’t leave, 200k did. Sure, they didn’t reach a target of 2.5m new users, but that’s not the same as losing them.

I know, shareholder announcements/analysts predictions etc, I know I’m not going to change that logic, but I still think it’s bad logic.

I think it’s that the logic only matters to shareholders who are willing to pay a premium price for the shares based on trajectory. Mess up the trajectory, mess up the share price.

They actually lost 700K subs to Russia, when they stopped the service there, and some around EMEA too. They actually added 500K subs net minus Russia impact.

I mean, pedantically, you’re correct but you’re missing a very substantive point - we regularly deal with metrics which are rates (or vectors) of change. Velocity is change in distance over time, for example - what Netflix had is a reversal of their growth. They had expected all inputs to yield at positive 2.5 mil. change in members. Instead, the lost 200k members. It is completely sensible to talk about their loss of velocity of growth. Moreover, if you want to be get into technicalities, they lost many more customers than 200k - but they gained enough new customers to net -200k - so why not object to that technically imprecise language too? Why? Because while technically incorrect, it still communicates something useful, just as it does to talk about the lost growth vs. expectations.

For all your points about technical and substantive arguments, I think you have skipped over the crux -

> They had expected all inputs to yield at positive 2.5 mil

The crucial word here is expected. I can model all the things and expect that I’ll get a million dollars next week, but I haven’t lost a million when I inevitably don’t get it the next week.

If you make a prediction of +2.5m new subscriptions, during a pandemic and associated economic flux, and the prediction doesn’t pan out, the only thing that’s happened is that you made a bad prediction.

I think it's still very much relevant within the context of the stock dive though - no-one invests in what you've done, they invest in what they think you're going to do next. So they've disappointed their investors, and their investors have disappointed them right back.

> If you make a prediction of +2.5m new subscriptions, during a pandemic and associated economic flux, and the prediction doesn’t pan out, the only thing that’s happened is that you made a bad prediction.

I mean, that’s demonstrably false. The world works by individuals taking action based on expected outcomes. That crosses species and pervades every waking moment of life. It is involved in things as simple as walking and as complex as mate selection, migration or habitation choices among thousands of others.

To treat this instance of variance between expected outcomes and reality as somehow different makes little sense.

They didn't "lose" 2.7m subscribers. but they did miss their goal by 2.7m.

The important thing to note is that stock prices aren't tanking because of 200k. If they had gained 200k subscribers, the stock would have tanked still. and the headlines would have been "netflix misses subscriber goal by 2.3m" instead and only investors would care

They also guided that they expect to lose another 2 million subscriptions in the next quarter. The stock price collapsed because it appears the growth story may be over.

My understanding is the commercials will only be on the lowest tier plan. Similar Hulu.

Reply on news.ycombinator.com