Netflix lost a million subscribers in the 2nd quarter, but expects a rebound

Netflix has not said its last word: the streaming giant lost in the second quarter, but less than expected, and is choosing to rebound this summer, to give measure of hope in investors who fear free fall. The industry pioneer announced on Tuesday July 19 that it lost 970,000 subscribers between the end of March and the end of June, instead of the 2 million expected.

“It’s not easy to talk about success when you lose 1 million” of consumers, thanks to Reed Hastings, the founder of Netflix. “But we are well prepared for next year”, he added during the press conference. Currently, 220.67 million users are registered worldwide.

In a sign that Tuesday’s news is reassuring to the market, its stock rose more than 7% in electronic trading after the New York Stock Exchange closed. The Californian company posted a turnover of 7.97 billion dollars (7.78 billion euros) for the period from April to June, a lower result than expected, which was put on account in a bad price. On the other hand, it made 1.44 billion in revenue, better than expected.

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These activities “prove that Netflix can’t be shut down now”answered independent analyst Rob Enderle. “They bought time, they had to stop the bleeding” subscribers, he continued. Netflix expects to gain another million subscribers in the third quarter and thus reach 221.67 million subscribers. However, there is a number below the end of 2021.

The leader threatened

To achieve this, the platform is counting on the success of the fourth season of science fiction and youth. Stranger thingswhich has just finished, and the immediate removal from The Gray Mana film by the Russo brothers, directors ofAvengers: Endgameit can become a franchise if it wins over the public. “With 1.3 billion hours on the clock for the 4th time Stranger thingsNetflix’s ability to create successful content has never been questioned.said Neil Saunders, CEO of GlobalData.

But “Netflix’s model is not suitable for stimulating the growth of the economy and the consumer community”, he said. After years of rapid success, and after taking full advantage of the disease and health bonds, Netflix is ​​going to a regulatory solution, increased by the competition that has saturated the market in years ago. Added to the loss of subscribers is a negative economic environment, from the war in Ukraine to inflation and a strong currency.

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“Netflix continues to be the leader in video streaming but if more franchises are not found that will become more popular, it will end up being difficult to stay ahead”said Ross Benes, analyst of eMarketer.

A new subscription, smaller, with promotion, in 2023

In the first quarter, the service lost 200,000 subscribers worldwide compared to the end of 2021. The news drove its price down by 25%.

Then the managers of the platform announced, in the month of April, their intention to offer a smaller registration form but with the announcement, after years of denying this low result.

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“Due to strong demand from brands, this product should increase their revenue per user. But there is no evidence that this will slow down subscriptions or attract new customer., Ross Benes insisted. Last week, the company said that the new name will be added to the three available options (“basic”, “standard” and “premium”), the least of which is 10 dollars. including this month in the United States. He hopes to start the foundation for the beginning of 2023.

In April, Netflix also announced that it would clamp down on the sharing of credentials and passwords, allowing many people to access the platform’s information for a fee. zero.

A system is needed “implemented next year as planned”, confirmed Greg Peters, director of operations. The decrease in the growth of the platform has also been eliminated: more than 400 employees were laid off in the last quarter, including in the United States. But the company continues to invest in knowledge: it announced the acquisition of the Australian animation studio Animal Logic, which has some 800 employees.

The world with AFP

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