Stranger Things 3 spurs much-welcome subscriber growth at Netflix

Netflix has had cause for worry lately. Gone are the days when it was the unquestioned king of the streaming world. As if Hulu chipping at its heels wasn’t annoying enough, this November, Disney is launching Disney+, a streaming service that will feature content from the company’s deep back catalog, as well as original shows in the Star Wars and Marvel Cinematic Universes. Two of the most popular shows on Netflix, The Office and Friends, are leaving so they can appear on NBCUniversal’s upcoming streaming service and HBO Max respectively.

And then, a few months back, Netflix released information about how well it did in the second quarter of the year, and it was pretty dire. Although revenues were up, Netflix badly missed projections for subscriber growth and actually lost subscribers in the United States. Investors panicked and the stock dropped by 10%. Was this the end of Netflix?

Well, no, of course not. Investors panic over shortfalls all the time, even if the company is raking in piles of money. Such was the case with Netflix then. And now, a new report from Bank of America to investors shows that the Netflix app is actually being downloaded 18% more than it was this time last year (specifically, there’s been a 34% increase outside the U.S. and a 13% increase within it.) According to the report, the bump was “likely aided by the release of ‘Stranger Things’ Season 3.”

The third season of Netflix’s ’80s-themed horror hit came out in July, and it was a good time. It also broke records for Netflix, with 41 million accounts watching the show within the first four days of release.

Naturally, upon news of Netflix’s reversal of fortune, the stock ticked up.

There are a few takeaways here. One, I don’t think it’s a good idea to get too concerned about stock drops or quarterly reports. Honestly, the smallest thing sends stocks rocketing up and plummeting down, and then something else comes along and they reverse course. Probably better to just focus on what the company is putting out.

And in Netflix’s case, it’s putting out shows like Stranger Things. It’s interesting to see how much a new season of a single show can benefit a streaming service. At the end of the day, people are subscribing to these things because they want to watch the content. Netflix has plenty of original content, but it’s not always easy to tell what’s worth watching and what isn’t. If Netflix wants to compete with the likes of Disney+ and HBO Max, it’ll have to be careful about green-lighting the best ideas, and about getting the word out.

Hopefully, what the coming streaming war will come down to is an embarrassment of great content for us, the viewers, as companies fall over themselves to compete for our attention. I think there will be enough space for all the players and that Netflix will be fine, particularly if it keeps its focus on making stuff people want to watch.

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h/t The Wrap