The scenario is not so bad for the company, as the forecast was for a drop of 2 million subscribers in the quarter; shares rise 8% in the after market
This Tuesday (19), Netflix released its financial report for the second quarter of 2022 and the loss of “only” 970 thousand subscribers. It sounds alarming, but it’s far less than the 2 million drop in paying accounts projected for the period. In addition, the company predicts a recovery in the coming months.
The beginning of 2022 was turbulent for Netfix, which recorded the first drop in subscribers in 10 years . But the company now shows that, despite the bad scenario that still persists in the second quarter, it is focused on strategies to get around the situation.
In context, the figures released were generally positive: Netflix ended the second quarter with a 9% growth in its revenue (US$ 7.97 billion), with 220.67 million subscribers and with an earnings per share in the house. of US$ 3.20 – which exceeded its expectations of US$ 3.00 for the period.
Inflation and Stranger Things
The impact that the appreciation of the US dollar has had against most other currencies – and the fact that almost 60% of the company’s revenue comes from outside the US – was one of the growth difficulties pointed out by Netflix for this quarter.
On the other hand, the platform’s content was highly celebrated in the balance sheet as one of the main factors responsible for the public’s adherence.
The highlights of the catalog were headlined by the fourth season of Stranger Things , which had a triumphant return among fans . With its first seven episodes broadcast during the analyzed period, the series generated 1.3 billion hours viewed on the platform, in addition to having aroused the interest of users for its seasons 1, 2 and 3, viewed five times more than in the previous month.
Fee for shared accounts and new plan
According to Netflix, in the short term, the company’s priority to accelerate its revenue growth is to improve its monetization. This goal, in recent months, has already resulted in some changes announced by the platform, such as the launch of a cheaper plan with ads and taxation of shared accounts .
Netflix’s new bundle, slated for release in early 2023, will feature Microsoft as its technology and ad sales partner , but its value has yet to be released. It is worth remembering, however, that, currently, the cheapest service plan costs $9.99 / month – a subscription value higher than that of many other streaming platforms available in Brazil.
The company’s strategy of charging an extra fee to those who share passwords with people outside their home is already being tested in some Latin American countries . In Argentina, El Salvador, Guatemala, Honduras and the Dominican Republic, the measure came into force recently and the amounts charged range from R$9 to R$16.
Third quarter predicts new subscribers
With these new strategies adopted and going against what happened in the first half of the year, Netflix’s expectation for the months of July, August and September is that there will be a growth of 1 million subscribers.
The good news, however, falls short of what experts in the field had projected: an increase of 1.84 million paying users on the service.
A foot on the brake that shows that the company has adopted a very cautious policy in relation to its results, both with regard to the high projection of loss of subscribers, as well as the low expectations of growth for the coming months.
Regardless, however, the numbers released today in its letter to investors appear to have pleased Wall Street, as the company’s shares rose 8% on Nasdaq (NY) after the market closed.