Mumbai: On Tuesday, Netflix reported a loss of almost 1 million subscribers during the spring amid soaring inflation that’s squeezing household budgets while the company faced tougher competition from rivals including HBO Max and Disney+.

However, the drop was not nearly as high as the two million cancellations that had been forecast. Nonetheless, Netflix co-CEO Reed Hastings didn’t try to minimize things during a Tuesday conference call about the results. “It’s tough losing a million subscribers and calling it a success,” he said.

Netflix was probably spared from deeper losses by the ongoing popularity of Stranger Things, its science fiction/horror series that debuted in 2016. Stranger Things 4 is the second-most-popular TV series on Netflix, drawing more than 1.3 billion hours of watch time on the platform in its first 28 days, according to the company.

Despite the downturn, Netflix still earned $1.4 billion, or $3.20 per share during the quarter, a 6 per cent increase from the same time last year. Revenue rose 9 per cent from the same time last year to nearly $8 billion. Netflix’s stock price had previously plunged by nearly 70 percent in the last year, wiping out about $180 billion in shareholder wealth.

Netflix is taking steps to decrease costs and bump revenue. The company has been cutting costs with employee and contract worker lay-offs in such areas as marketing and social media. In April, the company announced a crack-down on subscriber password sharing.

To attract and retain subscribers, the company began branching out last year by adding free video games to its streaming service and is also reportedly exploring live-streaming content, such as comedy specials. In addition, Netflix has taken another step toward putting together a cheaper, ad-supported subscriber option when it announced it will team up with Microsoft to deliver the commercials.

“We have some headwinds right now and we are navigating through them,” Netflix co-CEO Ted Sarandos said at the end of Tuesday’s conference call. “We’ve seen entertainment formats come and go, we’ve seen entertainment business models come and go, and we have managed to grow through all of them, though all kinds of economic conditions and through all levels of competition.”

Last year, Netflix India made a bold move in slashing prices across its four subscription tiers, notably cutting its popular ‘Basic’ plan by a huge 60 per cent, reducing it from $6.24 (Rs 499) a month to just $2.49 ( Rs 199).

While the company didn’t state a reason at the time for the price cut, Netflix India’s vice president of content Monika Shergill told the entertainment news portal Deadline that the strategic move was made in a bid to open up the service to a broader range of audiences across the Indian market.

Six months down the line, Shergill says the pricing cut is “working very well for us, and it’s brought in a whole new set of audiences,” enabling Netflix India to prioritize subscriber growth at a time when the company had begun to ramp up its licensing and original programming slate beyond Hindi and English-language content. “It’s a very different pricing model,” she says of the Indian streaming market, adding that most local competitors work on annual plans with the benefit of big discounts from telco partners.

“For us, our revision of the pricing was very well-timed with our content strategy and the new slate we were rolling out. We were very clear that when we started programming for a broader set of audiences that we would need to increase access and the pricing was a very important part of it,” said Shergill.

After Netflix’s better-than-expected second-quarter earnings on Tuesday, the company’s shares continued their recent upturn as Wall Street analysts had differing opinions on the takeaway from the report. After weeks of worry, investors took a brief sigh of relief. However, sceptics point out that the loss was the biggest in any quarter in the company’s 25-year history.

In a bold move to woo back subscribers and attract new ones, Netflix will stream the action thriller, The Gray Man this weekend after a limited release in theatres. The film cost a reported $200 million, the most expensive movie in Netflix’s history.