Video Source: YouTube, CNBC TV
Lisa Rich Wine and Akan Kusha Lana
Netflix Inc said it would dig deeper into video games as movie and television streaming services predicted slower subscriber growth amid intensifying competition and the lifting of pandemic regulations that kept people home.
The company’s share price fell 3.3% on Wednesday, closing at $ 513.54.
Netflix has survived a sharp slowdown in new customers after the 2020 boom, boosted by a stay-at-home order to curb the COVID-19 pandemic. In the US and Canada, Netflix reported losing about 430,000 subscribers in the second quarter, but only fell in the third quarter in 10 years.
Streaming video pioneers said they are in the early stages of expanding the offering of video games that subscribers can use at no additional charge. Initially, the company will focus primarily on mobile games.
“Games are seen as another new content category for us, as well as the expansion to original movies, animations and unscripted television,” the company said in a quarterly letter to shareholders. ..
In a post-revenue video interview, Chief Operating Officer and Chief Operating Officer Greg Peters said the multi-year effort would begin “relatively on a small scale” with the game that led to Netflix’s hit.
“We know that fans of those stories want to go deeper. They want to get more involved,” Peters said.
Netflix has worked on video games with several titles linked to the series, such as “Stranger Things” and “The Dark Crystal: Age of Resistance.”
Some analysts say the companies that dominate streaming video need to find new ways to get their subscriptions started quickly after years of rapid expansion. According to eMarketer, Netflix’s share of US revenue from subscription streaming video will shrink from nearly 50% in 2018 to 30.8% by the end of 2021.
“Netflix has brought an even more overwhelming quarter as competition in streaming space intensifies,” said Jesse Cohen, senior analyst at Investing.com. “The lack of new upcoming growth catalysts is one of the main reasons for Netflix’s relatively modest performance this year.”
Co-CEO Reed Hastings said games and other ventures such as podcasts and merchandise sales will be “supporting factors” that will help attract and retain customers in the core streaming video business.
The company forecasts to add 3.5 million customers from July to September. Wall Street was forecasting 5.5 million people, according to analysts surveyed by Refinitiv.
Just in the last quarter, Netflix added 1.54 million customers, surpassing analysts’ forecast of 1.04 million. The total number of subscribers at the end of June was 209 million.
A year ago, Netflix gained 10.1 million subscribers in the second quarter.
This year, Netflix felt the impact of COVID-19 on TV production and left the company with a small menu of new titles. At the same time, services such as Walt DisneyCo’s Disney + and AT & TInc’s HBO Max have captivated customers, and the summer blockbuster is back in the cinema.
Relaxed pandemic security measures have moved people away from their homes and televisions.
Revenues from April to June were $ 2.97 per share, below the average forecast of $ 3.16.
Netflix promises more lineups in late 2021 including new seasons for You, Money Heist and The Witcher.
If the subscriber forecast goes well, Netflix will add more than 54 million subscribers over the last two years. This is a pace consistent with the annual addition before the COVID-19 pandemic.
He also noted that streaming TV still accounts for a small portion of total viewing time and that the service is not mature outside the United States.
“It’s still a huge award and we’re still in the best position to chase it,” said co-CEO Ted Sarandos.
Reported by Eva Mathews and Akanksha Rana in Bangalore and Lisa Richwine in Los Angeles. Edited by Shounak Dasgupta and Lisa Shumaker.