Netflix seems to be walking on eggshells, having lost as many as 430k subscribers in the US and Canada combined during the second quarter (Q2). And that’s not all, as it’s business forecasts for later in the year also seem to be much weaker than expected, causing investors to raise doubts over the streaming platform’s future amid the economic reopening.
Projections Much Lower than Expected
Predicting about 3.5 million new subscribers for the third quarter (which is significantly less than the 5.9 million that analysts had projected), the California-based firm has rekindled the concerns that investors have, as their hopes for a strong rebound in the third quarter after the rocky road during the second quarter, have been thwarted.
The past year has seen Netflix face growing competition from other platforms like Apple, Comcast, Disney, and WarnerMedia, each of whom have launched their own streaming services, and are now just a few names among over 100 OTT platforms available to users in the United States and Canada, as has been reported by data company Ampere.
However, executives like Reed Hastings, the co-CEO at the firm, hold that the weaker figures are not because of growing competition, since they believe that HBO or Disney don’t have any “differential impact compared to the past,” based on their data. Meanwhile, Ted Sarandos, another co-CEO, told investors that they should wait and see if “one plus one equals three,” as against the typical “one plus one equals two.”
Nevertheless, the growing competition and the worldwide lifting of COVID restrictions have definitely attended a sharp decrease in the platform’s growth. However, executives are blaming lighter offerings in terms of shows and movies, for the weak subscription numbers. They also promise that the next quarter will see the company bouncing back, through the return of many shows like Sex Education and The Witcher.
Games to the Rescue?
One area which saw some increase in shares happened to be Netflix’s plans of coming up with its own video game services. These increased the shares by a small 0.8 percent, slightly offsetting the core weaknesses. For this new venture, Mike Verdu, an industry veteran who has previously worked with Oculus, was taken on board just last week. The team will first be dealing with only those games that can be played on mobile phones, and for now, paying subscribers will not have to pay any extra money for the benefits.
Source: Ars Technica