Research archive for NFLX

Netflix's biggest strategy shift in years seems to be going well. Early indications are that the password-sharing crackdown in the US is resulting in an increase in subscribers. The big worry was that the new restrictions would cause users to quit.

Netflix's day of reconning has arrived in the US. Last week the company started to notify users that Netflix accounts are only to be shared within a single household, and that password sharing with users outside of the household would result in an extra fee of $7.99 per person.

Netflix plans to invest $2.5 billion in South Korea over the next four years. They want more Korean TV shows, movies, and unscripted content, and are committing double the amount they have invested there since 2016.

Netflix reported first-quarter results on Tuesday, with revenue in line with expectations but lower than expected subscriber growth. Sales came in at $8.16 billion with only 1.75 million new paid subscribers, which was 20% below what analysts had predicted.

Netflix is upping the ante on their main competitor, sleep. They announced over 100 new games in production, with scheduled monthly releases. Currently, fewer than 1% of users play the games. Hopefully more variety will change that.

Netflix had results out last Thursday, which were better than expected. The stock jumped by 8.5% on Friday.

The Jeffrey Dahmer biopic series has broken some Netflix records, becoming their most successful show of all time with 701.4 million of watch time since launch. This was partly thanks to a reversal in subscribers in the third quarter. Dahmer was watched for a whopping 196.2 million hours in its first five days on the platform.

Netflix gave Vestact clients a great start to earnings season last night. They added 2.4 million subscribers in the previous quarter, including 100 000 in the highly competitive North American market. These additions more than make up for the lost subscribers at the start of the year. Importantly, management forecast the addition of 4.5 million subscribers for the final quarter of the year.

On Tuesday night Netflix released their second quarter results. This was a hotly anticipated release because in the previous quarter, the company showed its first subscriber loss in a decade and the share price was pummelled. The company expected to lose two million subscribers this quarter but only lost 970 000. The share price jumped 10% in aftermarket trading.

Netflix are launching an ad-supported service and they have picked Microsoft as their partner. You might not have known this, but Microsoft made $10 billion in advertising sales last year, mostly through Xandr, an ad service business they bought from AT&T.

Disney has done incredibly well to leverage off their well known characters. From merchandise to games to theme parks. They even have Disney cruise ships, decorated with exciting themes, rides and restaurants. With dwindling subscriber numbers and increasing content costs, the time is nigh for Netflix to start doing the same, but they need to think out of the box.

Last night Netflix reported very disappointing numbers. The share price of the company is based on the expectation of continued subscriber and profit growth and guidance was for the addition of between 2.5 million to 4 million new paying accounts. Instead they reported a drop in accounts of 200 000, including the deactivation of 700 000 accounts in Russia. Even taking those into account, this was a big miss.

The streaming industry is entering a new growth phase. In the past, any company with a reliable platform and decent content would attract subscribers because people didn't have many options. We are now at the point where there is probably too much choice.

We have seen advertising become a big money spinner for tech companies with large audiences. Amazon is a good example. Now, Disney Plus will launch an ad-supported version. These news stories got me thinking again about Netflix's potential to deepen its advertising revenues.

Netflix released its earnings last week Thursday after the market closed, and warned of slowing subscriber growth. The following day, the share price of the streaming giant tumbled by 21.8%, even though it beat on profits, and revenues were in line with expectations.