Netflix stock was down more than 20 per cent
Amid assurances from the company’s top executives that Netflix’s streaming media prospects remain bright in the light of the return of the hit show Bridgerton for a second season and the upcoming release of an action feature with Ryan Reynolds, shares of Netflix fell.
Netflix growth
As a result, Netflix stock was down – 20 per cent by the end of the 45-minute results interview. In the first three months of 2022, the world’s biggest streaming service expected moderate growth, when many had anticipated a return to predictable, pre-pandemic quarterly gains, Wall Street analysts and the company’s own executives struggled to explain.
CFO Spencer Neumann of Netflix remarked, “It’s hard to pinpoint exactly why our acquisition hasn’t recovered to pre-Covid levels.”. As a worldwide epidemic continues to ravage the world, “it’s probably a little of the overall COVID overhang that’s still continuing after two years, some financial pressure in various areas of the world, particularly in Latin America.”
Also Read: best torrent sites for netflix
Around two-thirds of the four million new members that Netflix attracted during the same time period a year earlier are expected to join during the January-March quarter. Increased competitiveness and a slower-than-expected return to routine following the epidemic distortions were cited by Wall Street experts as probable explanations.
During the pandemic lockdown in early 2020, Pivotal Research Group analyst Jeff Wlodarczak said Netflix and other services, like Disney+ and Peloton, acquired members, are fighting to achieve balance following outsized growth.
Wlodarczak remarked, “Streaming is not over, it is the future.” Even today, just a small number of people throughout the world use streaming services to watch television.
Though Netflix’s first-quarter prediction was kept low by Ted Sarandos and the company’s co-CEO, some interpreted it as a sign of increasing competition “Our relationship didn’t suffer in the least. Retention wasn’t affected, and we didn’t look at the competition because of this.”
Rivals grabbing customers
Disney+, WarnerMedia’s HBO Max, and Amazon Prime Video are investing billions of dollars on entertainment engagement to grab new customers.
According to Forrester’s Vice President of Research, Mike Proulx, “the fact is that the streaming business has gotten saturated.” Customers who are worried about the total cost of their streaming subscriptions will benefit from this since they will have more options.
Analysts are keeping a careful eye on how Netflix’s new price rise, which pushed the cost of a monthly membership to $15, affects subscribers in the United States and Canada.
“As we head into a 2022 year that many seem to believe will come with streaming video subscriber saturation overall, it will be important to gauge whether Netflix can retain subscribers at historical rates now that their most popular tier costs the same as HBO Max after their most recent price increase,” wrote Joe McCormack, Analyst at Third Bridge.
Co-founder Reed Hastings told investors that streaming would eventually replace traditional television in a decade or two and that there is plenty of space for development.
