The overwhelming surge in media consumption this year has made 2020 a record-breaking year for Netflix. The streamer added more than 10 million new subscribers in Q2, bringing its overall subscriber count to over 190 million. But analysts say the rest of the year isn’t looking as promising. The coronavirus causing a huge delay in production combined with the rate at which viewers are consuming media, Wedbush Securities media analyst Michael Pachter thinks the streaming service is running out of enough new content to keep viewers interested.
“The extraordinary level of consumption of Netflix content multiplied by its large subscriber base suggests to us that some meaningful percentage of subscribers will ‘finish’ Netflix before a large quantity of new content can be produced,” Pachter wrote in a note.
Pachter thinks Netflix has already begun to feel the hit from dwindling subscribers after the initial boom in Q2. Pachter predicts the streamer added just 250,000 domestic subscribers and 2.3 million internationally in Q3 which ended September 30. Time will only tell, as Netflix will release its Q3 reports on October 20.
“The law of large numbers suggests to us that if the rate of subscriber churn grows by ‘only’ 1%, Netflix could face an uptick loss of subscribers per quarter beginning later this year or early next year,” Pachter wrote. “We suspect that this phenomenon has already begun and led to the company’s lackluster guidance for Q3 net additions.”
Earlier at the end of summer, Pachter predicted Netflix could very well start losing 2 million subscribers each quarter.