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Even with hits like Stranger Things 4, Netflix is in more trouble than we thought

stranger things netflix

Two of the biggest Netflix original series of all time debuted highly-anticipated new seasons during the second quarter, including Ozark (the second half of its fourth and final season) and Stranger Things (the first seven episodes of Season 4). Regarding the latter, the final two episodes of Stranger Things 4 hit Netflix just a few days ago, though the third quarter had already begun by then. Still, the show racked up almost 1.2 billion hours from Netflix account owners streaming the season in the first 28 days following its May 27 debut.

Both of those shows set viewership records, and that was welcome news indeed for Netflix. Why? Well, coming into Q2 the streamer was forecasting a jaw-dropping loss of 2 million subscribers. As a result, cue Netflix’s scramble to release an ad-supported subscription tier and a crackdown on Netflix password-sharing. This week, meanwhile, ahead of the company’s next quarterly earnings release later this month, analysts are forecasting that the subscriber decline won’t be that bad.

In fact, the number of people canceling their Netflix accounts might be worse than initially estimated.

More Netflix account cancellations than expected

If that sounds crazy to you, during a quarter when Netflix debuted two of its most anticipated season of TV to keep viewers bingeing, you’re not alone.

A Barclays forecast out on Wednesday, July 6, sees Netflix losing not 2 million but 2.8 million subscribers during the second quarter (for which the company will report earnings on July 19).

Barclays analyst Kannan Venkateshwar seems to have based that forecast in part on two things. One, a drop-off in Netflix app downloads. And two, general Netflix engagement figures. Which, again, you might have expected to soar during a quarter that had a new season of Stranger Things. Moreover, Venkateshwar brought up the quantity-vs-quality talking point that seems to be driving a lot of the Netflix account cancellation activity.

“In our opinion, Netflix may need to rebalance its content mix a bit more towards quality, especially given competitive offerings from Disney, Apple, HBO, and Amazon,” the Barclays analysis continued. Indeed, Netflix’s streaming rivals are amping up their own quality considerably throughout the back half of 2022.

HBO, for example, has a Game of Thrones prequel (House of the Dragon) coming in August. And Amazon’s Lord of the Rings series The Rings of Power is coming on Sept. 2.

Netflix office
An exterior shot of a Netflix office building with a large Netflix logo sign at the top. Image source: FG/Bauergriffin.com/MEGA

Does Netflix make too much crap?

In Barclays’ pessimistic view, things get even worse for Netflix in 2023. So many subscribers will ditch their Netflix accounts that the investment bank sees the streamer performing at the low end of its guidance for next year. And even that could be too rosy of a prediction, the analysis continues. Partly because of the investment that will be required to continue building Netflix’s ad tier and its gaming business.

Netflix, nevertheless, will continue to take some big swings this year — in an effort to maintain and grow the number of Netflix accounts it currently has, to the greatest extent possible. Case in point: The Gray Man, a big-budget spy thriller starring Chris Evans, Ryan Gosling, and Ana de Armas.


The movie, which hits Netflix later this month, cost $200 million to make. It had the Russo brothers of Avengers fame at the helm, and it has every indication of being a hit.

And yet —

Netflix has reportedly embargoed reviews of The Gray Man until the very last second next week. Hopefully, that’s not a hint that the movie is another expensive misfire for the streamer. One that spurs even more subscribers to cancel their Netflix accounts.


Andy Meek profile photo

Andy Meek is a reporter who has covered media, entertainment, and culture for over 20 years. His work has appeared in outlets including The Guardian, Forbes, and The Financial Times, and he’s written for BGR since 2015. Andy's coverage includes technology and entertainment, and he has a particular interest in all things streaming. Over the years, he’s interviewed legendary figures in entertainment and tech that range from Stan Lee to John McAfee, Peter Thiel, and Reed Hastings.