Netflix (NASDAQ:NFLX) stock is down 6% Wednesday after a Q3 earnings call in which the company failed to meet Wall Street’s expectations for subscriber growth. The company was expected to rake in an additional 3.3 million new subscribers in the third quarter, but was only able to deliver 2.2 million, a 4.6 million-subscriber decrease from the same quarter last year. While subscriber numbers dwindled, revenue just barely made the cut, raking in $6.44 billion rather than the expected $6.39 billion.

The lackluster earnings report is the first blow to Netflix in what has been a blockbuster year for the company. Netflix brought in 15.77 million subscribers in Q1 and 10.09 million in Q2, beating expectations of 7 million and 8.26 million new subscribers for those quarters respectively. Netflix claimed that the disappointing Q3 subscriber count was due to the extremely high subscriber counts in the previous two quarters.

Either way, the decline may be a sign that Netflix’s success during the pandemic is short-lived or that the rise of several treaming competitors has eaten away at its market share. 

Over the last 6 months, Netflix’s pageviews have declined by over 35%. Its Amazon Alexa ranking has also dropped from 19 down to 22, reflecting decreased usage since the first months of COVID-19. 

Netflix has seen competitors like Peacock and Disney+ rip content off its platform, including major apps like The Office, Friends, and films from the Marvel Cinematic Universe. The loss of just a handful of programs may seem inconsequential, but these flagship, landmark shows are huge deals for streaming companies - so huge, in fact, that Netflix paid $100 million to keep the show on its platform in 2018. For perspective, that’s almost exactly the budget of last year’s film 1917.

Netflix’s lack of a killer app, perhaps excluding Stranger Things and The Haunting of Bly Manor, is undoubtedly preventing the platform from reaching its desired heights.

Netflix’s response to this, and its strategy over the last few years, has been to ramp up production on original shows and movies. The number of Netflix Originals has increased nearly 28% so far this year as the company has made an effort to provide extra content during production shutdowns and to capitalize on increased viewership.

That quality over quantity approach may be starting to have a negative effect. Netflix’s originals increasingly receive critical beatings, though the recent season of horror show The Haunting of Bly Manor generated buzz on social media. The all-at-once dump model that Netflix shows have practiced for years now also makes it harder for a show to generate long-lasting appeal. While this model works well for binge-watching, last year’s The Mandalorian on Disney+ proved that the old method of releasing an episode per week helps generate a long-lasting event out of a show release. Or, in The Mandalorian’s case, a weekly deluge of Baby Yoda memes.

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