Competition for viewers among streaming services is tight. Netflix’s entrance into the ad space will be complicated. all other streaming services,” he tweeted.īut engineering this big of a move won’t be easy. “Netflix’s advertising opportunity is REAL and directly tied to its enormous time spent vs. Rich Greenfield, an analyst at LightShed Partners, thinks there’s significant room for Netflix’s pivot to advertising to be a success. “Our goal is to find an easy-to-use paid sharing offering that we believe works for our members and our business that we can roll out in 2023.” “We know this will be a change for our members,” it told shareholders. The company estimated that 100 million households use Netflix but aren’t paying for it directly. It’s also looking at clamping down on password sharing. Netflix, partnering with Microsoft, is racing to develop a new lower-priced option that will be supported by ads, an attempt to scoop up customers that are watching their wallets as inflation bites. That will mean making major changes to the business. Other tech firms, like Google parent Alphabet and Facebook’s Meta are off 21% and 48%, respectively. Its stock is down almost 67% year-to-date. Looking ahead: Netflix still has work to do to convince investors that it’s on the right track. The release of the fourth season of the wildly popular show “Stranger Things” also provided a boost. That was offset by increased subscriptions elsewhere, a sign the company’s investment in foreign language programming is paying off. Netflix’s most substantial subscriber loss came from its biggest market, the United States and Canada, where the streamer said it lost 1.3 million users in the second quarter. “So our excitement is tempered by the less bad results.” “We’re talking about losing 1 million instead of losing 2 million,” Chairman Reed Hastings said on a call with analysts. That created room for a positive surprise. Breaking it down: Netflix had already pushed expectations as low as it could, projecting that it would lose 2 million subscribers last quarter after shedding 200,000 in the first three months of the year.
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