Netflix Didn’t Exactly Deliver With Its Results

Netflix Didn’t Exactly Deliver With Its Results
Daniel Johnston

10 months ago2 mins

Mentioned in story

What’s Going On Here?

Netflix couldn’t pull off a livestream of Love Is Blind, so it’s probably no surprise that its results underwhelmed late on Tuesday too.

What Does This Mean?

After an outright drop this time last year, Netflix’s subscriber growth mishit for the second year in a row on Tuesday, adding 1.75 million users last quarter – short of analysts’ 2 million target – and nudging the total subscriber count to 233 million. And sure, with its newfound focus on profitable growth, it’s a good thing Netflix did beat profit expectations, but its less-than-stellar revenue and profit forecast for this quarter still left investors uneasy. Plus, Netflix hit pause on plans for a broad rollout of its password-sharing crackdown – in a bid to improve its current offering – delaying the anticipated revenue bump more accounts would bring. The result: an initial plunge in shares for the streaming giant.

Netflix subscribers

Why Should I Care?

Zooming in: Sharing isn’t caring.

Netflix shares eventually found their footing after that nosedive, which makes a lot of sense. Granted, putting the brakes on the password sharing crackdown isn't ideal – but in reality it just postpones the good days. See, with 100 million folks piggybacking on shared accounts, it’ll only take a fraction of them going solo to make subscriber counts and revenue bloom. Combine that with the slow-but-steady launch of ad-supported options, and Netflix's growth train isn't likely to stop anytime soon.

Netflix stock
Source: Google Finance

The bigger picture: Love is blind, and viewers cannot see.

Netflix is no longer the only big fish in the streaming pond, with the likes of Disney and Amazon making sizable splashes of their own these days. In fact, consulting firm Parks Associates thinks that Prime Video actually managed to snatch Netflix’s crown as the top subscription service last year. That means Netflix will need to keep cranking out hits – while steering clear of live programming blunders (ahem, Love Is Blind) – to keep subscribers from jumping ship.



All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG