Netflix, the leading streaming service provider in the market posted it’s second quarterly 2019 and just after that, the share price of the company slipped by 10%. Oxford reports learned that the company added 2.7 Million subscribers which are half of the expected value. While it also saw a drop of massive 130,000 paid accounts.
Going forward to the revenue part, Netflix generated revenue of $4.92 Billion beating the analyst[Refinitiv] expectation of $4.93 Billion. The 22 years old company revenue is witnessing an escalation of 26% every year. Talking about the missed expected gain of subscribers, the company said that it was due to the price increase in some regions.
However, Netflix is projecting propel of revenue to $5.2 Billion and inclusion of subscribers of 7 Million. The expectation of the rising number is due to the trending Stranger 3 Things and the upcoming season of” Orange is The New Black” and ‘The Crown”
Before the earnings were posted, Netflix shared were up by 35% this year but after the results, it dropped down to the lowest stock price since January shaving $20 Billion from its market cap. We acknowledge that Netflix lost its two premiere shows that attracted millions of viewers every year: F.R.I.E.N.D.S. and The Office. But the company stays positive as it says that it will help the company to invest in new content.
Talking about the streaming wars as many companies are coming up their own streaming services that include Apple+, Disney, Warner Media, NBC Universal, Netflix CEO Reed Hastings said in a call “It’s never been a better time for talent”. “They get to bid themselves off between us, Disney, Amazon, etc. But it’s not a zero-sum competition. I think everybody gets that. People will subscribe to multiple shows,” he added. ” It’s a great competition that helps build the industry, and the advantage of having something catchy like the ‘streaming wars’ is it draws more attention. And because of that, consumers shift more quickly from the linear TV to the streaming TV.”
He believes that Netflix is leading on the market amid the competition and it’s better for the whole market. Beyond 2020, the company expects that it will lower its cash flow as it will grow its profit margins and operating revenues.