Netflix's New Subscriber Count Is Rebounding In A Big Way

Being the first one in the market doesn't always mean that you'll always dominate that market. According to Business Insider, Hydrox cookies, known commonly as the cheap knock-off to Oreos, are not a knock-off of Oreos at all. In fact, Hydrox came first and Oreo copied them but, through a better marketing campaign and a more palatable name, Oreo surpassed the cookie it copied and today is the most popular cookie in the world. Is Netflix, which was one of the first streaming services on the market alongside Hulu, in danger of becoming the Hydrox of streaming?

Netflix has not been in the best shape lately as a company. According to Time magazine, Netflix lost 200,000 subscribers in January through March of 2022 and an additional 1 million in its second quarter. And that 1 million subscriber loss is, sadly, good news, as the streaming giant predicted a loss of 2 million subscribers, leading Netflix to lay off employees and introduce a cheaper ad-based subscription tier.

Seeking Alpha argues that the reason for Netflix's financial difficulties is that too many competitors have flooded the market, forcing it to contend not just with Hulu, like in its early days, but also against HBO Max, Amazon Prime, Disney+, Paramount+, Apple TV+, and a whole slew of others. A lot of these competitors are also attached to major studios, meaning they have large back catalogs of quality material and existing relationships with big-name stars.

But now, Netflix has gotten some good news for a change, and things may be looking up for the company.

Netflix's third quarter showed a massive improvement, winning them back the same number of subscribers they lost in the first half of the year and then some. According to Variety, in Q3 Netflix gained back 2.41 million subscribers and said that they expect to gain another 4.5 million subscribers in Q4 because that's when they'll be introducing their new ad-supported tier. The Variety article showed some doubt in that projection, though, as it pointed out that a good number of people subscribing to the lower-priced tier are likely to be existing subscribers downgrading their subscriptions.

According to The Motley Fool, Netflix was in debt to the tune of $14.5 billion at the end of March. However, The Motley Fool doesn't think that's going to be a problem anytime soon. The debt has been mostly used to invest heavily in quality originals, and Netflix has done a good job of spreading out where it borrows money from so that the due dates don't all come around at the same time. Netflix won't find itself having to pay back a significant amount of debt until around 2025, and it's hard to predict what will happen when that time rolls around. So that means that it's in Netflix's best interest to improve its numbers even more in the next three years, and they seem to be hoping that the new ad-supported tier will give them just the boost they need.