After the pandemic boom, Netflix struggled in the first half of 2022. The streaming pioneer is now promising a return to user growth – but outlook remains cautious.
Netflix didn’t do as bad as feared in the second quarter with blockbuster TV shows like Stranger Things. User numbers fell 970,000 paid subscriptions in the three months to end June, the streaming market leader announced after the US stock market closed. The customer decline continued but remained below the minus of the two million subscriptions expected by Netflix alone. In total, in the first half of the year, the number of paid video service user accounts worldwide amounted to almost 221 million.
However, the outlook remains cautious. Netflix only expects around one million new users in the current quarter. Analysts expected more here. Sales increased in the last quarter by 8.6 percent compared to the same period last year. up to $ 8.0 billion. Overall, Netflix grossed $ 1.44 billion, up from $ 1.35 billion a year ago. However, operating income fell 15 percent to $ 1.6 billion.
Disney and HBO are competing
Netflix was able to perform particularly well in the last quarter with Stranger Things. The show’s fourth season was the most popular streaming service as it claims to have ever aired – at least in English. Even so, the company struggled in its well-established markets, which were characterized by increased competition from rivals such as Disney and HBO. In the US and Canada, Netflix lost 1.3 million customers. On the other hand, there has been good growth in the Asia-Pacific region – also thanks to price cuts in India.
The quarterly report was well received by investors, and the shares reacted with a price jump of around eight percent after the trading day. But even if recently a shaky streaming service has wowed its shareholders with the prospect of a return to user growth, there are still plenty of construction sites for CEO Reed Hastings. After a poor first half of the year, Netflix puts many things to the test, including long-standing traditions. In the last seasons of their hit series “Stranger Things” and “Ozark”, the video service no longer released all episodes at once, as it did before.
Hastings has already bowed to an even greater taboo: Given the slow growth in user numbers, Netflix will offer a cheaper version of its streaming service with ad-supported clips. In fact, Hastings had always rejected this strategy. Netflix recently selected the software giant Microsoft as a technology partner to develop such a model. The advertising variant is expected to start in early 2023, initially in “a handful of markets”. Additionally, Netflix will soon begin taking consistent measures against unauthorized sharing of passwords. (dpa)