Netflix has reported its second-quarter earnings and it's not good at all. You can feel it in the air that a storm is coming for the company, and it's going to be really bad.
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LOS GATOS, CALIFORNIA - APRIL 20: A sign is posted in front of Netflix headquarters on April 20, 2022 in Los Gatos, California.
Despite this, Netflix is still the biggest streaming service. However, the company reported its first quarterly loss in subscribers in over ten years earlier this year and warned that it expects to lose two million global subscribers in the second quarter, according to CNBC.
However, there is a possibility that the losses will be even worse than projected. With concerns of a possible recession and rampant inflation, spending in the US alone has started to slow down. It also doesn't help that Netflix US has a standard plan of $15.49 a month.
Competition is also tight, with streaming platforms implementing ways to make their plans and offers more attractive in an attempt to dethrone Netflix.
Also Read: Netflix Price Hike AGAIN? Existing Customers To Feel The Brunt Soon
A Troubled Year Ahead
It was just at the start of 2022 that many analysts predicted that Netflix would add more than 20 million subscribers this year. JP Morgan analyst Doug Anmuth estimated that the company would add 17.95 million in 2022. But after the significant loss last quarter, Anmuth lowered his full-year prediction to around four million.
Netflix's market valuation has already gone from $300 billion to under $90 billion in less than a year.
Resiliency Amid the Storm
Netflix's Chief Financial Officer, Spencer Neumann reassured investors during last quarter's earnings conference that positive growth would come in the next two quarters.
He said that despite the two million subscribers whom they have lost in the second quarter, it doesn't mean that it will be a trend. Neumann said that they will grow revenue.
To do this, the platform counts on a stronger slate of content, such as a new season of The Crown. There is also a Ryan Gosling and Chris Evans moving coming, which is The Gray Man.
Aside from that, Netflix should also look into other regions if they want to rise above the storm. Netflix should overdeliver in Latin America, Asia Pacific, Europe-Middle East-Africa unit. Doing so may account for the losses in the US and Canada.
Money Will Come
Even if Netflix is going through troubled waters, all signs still point to the fact that the platform will continue making money. This is because it has a lot going for it that other streaming platforms don't have.
Aside from that, it remains to be the largest streaming service on the planet.
Netflix also plans to crack down on password sharing across the world. The process that could add millions of new subscribers.
Related Article: Netflix Password Sharing: 'Add Extra Member' Testing on South America, How Much Will it Cost?
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Written by April Fowell
