After losing more than a million customers in the first half of 2022, Netflix has a message for investors: It could have been worse.
After losing more than a million customers in the first half of 2022, Netflix Inc. has a message for investors: It could have been worse.
The sudden reversal in subscribers -- ending a decade of uninterrupted growth -- has spooked Wall Street and Hollywood, both of which saw streaming as the future of entertainment. Shares of Netflix were down 68 per cent this year through Monday’s close. “Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product, content, and marketing as we’ve done for the last 25 years, and to better monetize our big audience,” the company said in a letter to shareholders.For the second quarter, revenue grew 8.6 per cent to US$7.97 billion, Netflix said. That missed Wall Street estimates of US$8.04 billion, in part because of the strong dollar.
Chairman Reed Hastings long positioned Netflix as an advertising-free alternative to cable TV, but now says commercials are necessary to appeal to people who find the service too expensive.Netflix has raised prices several times and is now one of the most expensive streaming services. The company will introduce the advertising-supported option in a handful of countries later this year, and just tapped Microsoft Corp. to handle ad sales and technology.
The popularity of the fourth season of “Stranger Things” exceeded the expectations of Netflix executives. The supernatural drama has been one of the service’s most popular titles since its debut in 2015, and turned star Millie Bobby Brown into one of the most in-demand actresses in Hollywood.
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