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Netflix Chief Executive Reed Hastings may have missed the real reason why US subscription numbers fell



New research into how users react when they do not know what to look at in their video streaming service could help explain why Netflix is ​​losing subscribers.

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Second Quarter Profit Report showed fewer new subscribers than expected. Nielsen's viewing habits can help explain what consumers are doing if they have not bought Netflix subscriptions lately.

The company said it has added 2.7 million subscribers worldwide in the second quarter. The company predicted it would add almost twice as many (5 million subscribers) and analysts were disappointed. The company also lost 1

26,000 US subscribers in the second quarter, the first such loss in 2011

This sent Netflix shares. Netflix shares fell by more than 10% on Thursday. (Netflix did not respond to the request for comment on this story.)

"We believe the content of the second quarter has contributed to less growth in added payments than we expected," said Netflix executives in a letter to shareholders this week. Netflix Chief Executive Officer Reed Hastings said this would be a focus in the third quarter and said the third string of Stranger Things had already broken a record. the company said on Twitter

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– "More than any other movie or series in the first four days. And 18.2 million have already finished the whole season. "

But Nielsen has another, perhaps worse, theory that goes beyond other Hulu, Disney broadcast shows.

DIS, -0.66% CBS

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and Amazon: When there is too much video streaming content to choose from, viewers turn to a trusted old friend: broadcast TV.

If video streaming subscribers do not know what they want to watch, they are almost twice as likely to set up their favorite TV channel (58%) instead of looking at their streaming service menus (33%), according to a study Nielsen.

Streaming service recommendations do not seem to bear much weight – 44% of respondents said they would scan through TV channels to decide what to watch, and 26% said they were watching broadcasts recommended by their subscription service.

When viewers are indecisive, preferences for television are stronger within the 35-49-year-old demographic group compared to viewers aged 18-34. friendly, award-winning content. The thing is that viewers have to choose which movies and serials they will watch, and observers say many of them get burned out of this decision making.

In addition to its revolving library of existing movies and TV shows like "Friends", Netflix has increased its own content by releasing about 1,500 hours of original series and films in 2018 with one rating. Viewers between 18 and 34 years have spent 9.4 minutes browsing through content. Viewers aged 35 to 49 spent 8.4 minutes.

Studies of behavioral psychologists have shown that too many choices can overwhelm consumers, create the unpleasant feeling known as the "fatigue of the solution," and sometimes make them close and move away from a potential purchase.

TV viewers also have to choose what channel to watch. Still, some of the attractiveness may be how television simply broadcasts anything on the channel instead of giving viewers even more opportunities for what to watch.

2018 was the first time he had online video subscriptions than cable subscriptions across the country, according to the Motion Picture Association of America. Globally, there were 613.3 million subscribers for streaming and 556 million subscribers for cable TV.

The video stream is increasingly overpopulated. In addition to Hulu, the CBS streaming service and Amazon Prime, there are also HBO Now and Sling TV to name a few. The Disney service, Disney Plus, will be launched in November and Apple

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own service is scheduled to be released later this year, although no exact date yet. AT & T

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who owns HBO, also plans to release HBO Max this spring.

Netflix shares have risen by more than 20% so far, compared with 16% Dow Jones Industrial Average

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and a 19% increase for the S & P 500

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