Netflix continues to lead the streaming market at a record pace. During the second quarter of this year, it reached 238.4 million subscribers, that is, a growth of 8% more than the same period last year.
Netflix has added 5.89 million new customers, largely thanks to the new policy implemented by the company for greater control of shared accounts by its users. This figure doubles what Wall Street had calculated, and also makes this second quarter of 2023 the best second quarter for the company since the peak of the pandemic.
After the publication of these numbers, Netflix reaches the highest number of subscribers in the company’s history, achieving a net profit of 1,488 million dollars (1,328 million euros) on revenues of 8,187 million dollars, which represents an increase of 2.7% compared to the second quarter of 2022.
However, not everything was going to be good news for the American company. The third-quarter revenue forecast fell short of Wall Street expectations, hinting that the new accounts and advertising strategy is on track but is still not delivering the growth expected by analysts over the longer term. In fact, shares of Netflix fell as much as 6% to $448.88 in extended trading, after rising 62% this year through Wednesday’s close.
The data they made public this Wednesday is good “but not enough to push the shares up, given the movement of the last three months,” said analyst Rich Greenfield, quoted by the Bloomberg agency, after the publication of the results.
This same Wednesday, Netflix eliminated the possibility of contracting its free plan with lower price, and from now on consumers will have to choose between a cheaper service with advertising or a more expensive plan if they do not want to see ads. In addition, in May, it began charging users in more than 100 countries for continuing to share their passwords, one of the keys to this record growth that we discussed earlier. This change of course aroused controversy among millions of subscribers, and despite the fact that Netflix had an increase in cancellations when this change was published, it would then have greater growth in the second half of this year, and it has been so.
The leading streaming content company’s third-quarter revenue forecast of $8.52 billion fell short of Wall Street estimates, which had expected an average of $8.67 billion. Netflix explained that advertising revenue and additional subscriptions from password sharers were not large enough to offset, for example, not increasing the price of the fee. “While we have made steady progress this year, we still have work to do to accelerate our growth again,” the company said in a statement about its third-quarter growth forecast, which stands at 7.5%.
Despite this, the results were predictable due to the crisis in Hollywood caused by the first simultaneous strike by the Actors Union and the Writers Guild in 63 years, which has left the activity of the global entertainment industry ‘stnad by’.
However, Netflix has not wanted to give greater importance to this fact since in the statement to investors there is only one reference to it, to indicate that the “updated forecasts” after the strikes only reveal “lower spending on content”. Lastly, they assure that they have a large number of premieres pending and that they hope to achieve better figures in the following quarters.
