Netflix faces tough road ahead despite low second-quarter subscriber loss

Netflix Inc. may have calmed investors’ worst fears with a second-quarter subscriber loss that was better than expected, but a closer look at the streaming giant’s results indicate it still faces significant hurdles.

Wall Street cheered Tuesday’s subscriber numbers, which were only half as bad as the company forecast. Netflix also projected a return to subscriber growth in the current quarter. The shares rose 7.4 per cent on Wednesday and the positive sentiment lifted other media stocks, including Walt Disney Co and Paramount Global.

But Netflix still lost 970,000 subscribers globally in the quarter and is seeing increased competition from rivals. To generate more revenue, it’s cracking down on password sharing and launching a new lower-priced tier featuring advertising, moves that are departures from how it operated in the past.