Netflix’s 3rd Quarter Report is Out
Netflix’s 3rd Quarter Report is out!
Is the Netflix economic crisis over? Third-quarter earnings results suggest so. The streaming company gained over 2 million subscribers, avoiding the third straight quarter of subscriber losses. And the projections for the next quarter are even better: it seems it will add another 4.5 million subscribers in Q4.
Is it a complete victory? Some analysts say no after six months of slowing growth and heavy layoffs. But Netflix cofounder and CEO Reed Hastings and the company’s chief of content and co-CEO, Ted Sarandos, have other opinions. “Our competitors are investing heavily to drive subscribers and engagement, but building a large, successful streaming business is hard,” they said. “We estimate they are all losing money, with combined 2022 operating losses well over $10 billion. Netflix, on the contrary, estimates $5 to $6 billion annual operating profit.”
Those good results came before Netflix’s launching of a lower-priced, ad-supported tier. Still, the arrival is timely, given the need to compete with recent and upcoming lower-priced alternatives, such as Disney+’s forthcoming $7.99/month ad-supported tier.
Becoming more competitive is imperative for Netflix, which needs to prove that its strong Q3 subscriber results herald the reversal of misfortunes during the year’s first quarters. The ad-supported tier will likely monetize a new segment of consumers. New research from Morning Consult shows that the price, rather than a perceived lack of content selections, is the main reason for not paying for any video streaming subscriptions.
Sources: Business Insider; Morning Consult
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Netflix’s 3rd Quarter Report is out!
Is the Netflix economic crisis over? Third-quarter earnings results suggest so. The streaming company gained over 2 million subscribers, avoiding the third straight quarter of subscriber losses. And the projections for the next quarter are even better: it seems it will add another 4.5 million subscribers in Q4.
Is it a complete victory? Some analysts say no after six months of slowing growth and heavy layoffs. But Netflix cofounder and CEO Reed Hastings and the company’s chief of content and co-CEO, Ted Sarandos, have other opinions. “Our competitors are investing heavily to drive subscribers and engagement, but building a large, successful streaming business is hard,” they said. “We estimate they are all losing money, with combined 2022 operating losses well over $10 billion. Netflix, on the contrary, estimates $5 to $6 billion annual operating profit.”
Those good results came before Netflix’s launching of a lower-priced, ad-supported tier. Still, the arrival is timely, given the need to compete with recent and upcoming lower-priced alternatives, such as Disney+’s forthcoming $7.99/month ad-supported tier.
Becoming more competitive is imperative for Netflix, which needs to prove that its strong Q3 subscriber results herald the reversal of misfortunes during the year’s first quarters. The ad-supported tier will likely monetize a new segment of consumers. New research from Morning Consult shows that the price, rather than a perceived lack of content selections, is the main reason for not paying for any video streaming subscriptions.
Sources: Business Insider; Morning Consult
