The streaming market leader Netflix is spoiled for success this year. Subscription numbers boomed in the corona pandemic, and the stock climbed from one record high to the next. Despite over ten million new subscriptions, investors were now disappointed.
The online video service Netflix continues to benefit from the fact that many people stay at home and watch TV in the corona crisis. However, the pandemic-driven rush of customers has now abated significantly. After the subscription boom at the beginning of the year, the bottom line was 10.1 million paid subscriptions in the second quarter, as the streaming market leader announced on Thursday after the US stock market closed in Los Gatos, California. In the previous quarter it was 15.8 million. At the end of June, Netflix had a total of almost 193 million payment subscriptions worldwide.
The company anticipates that the rush will continue to decrease. “We expect less growth in the second half of the year than last year,” Netflix boss Reed Hastings said in a letter to the shareholders. This was not well received by the market, the share temporarily fell by around twelve percent after the exchange, although Netflix exceeded its own quarterly forecast and that of many analysts. Before Friday’s stock exchange launch in the US, a higher price was in sight. So far, the company has been one of the biggest stock market winners this year, and by 2020 it had already gained over 60 percent.
In the previous quarter, the restrictions on going out due to the corona crisis and series hits such as “Tiger King” had given the video service an unusually strong growth in new customers, which caused great euphoria in the financial market. The stock price has climbed from one record high to the next in recent months. With a market value of around $ 232 billion recently, the streaming market leader even passed the Hollywood giant Walt Disney, which, unlike Netflix, is badly hit by the corona crisis.
Netflix itself had predicted that the customer flow would subside compared to the strong first quarter. To make matters worse, the big blockbuster productions were missing this year despite a new season of the crime drama “Money Heist”, Spike Lee’s new film “Da 5 Bloods” or the comedy production “Space Force”. Business was still going well. Revenues increased a strong 25 percent year over year to $ 6.2 billion and earnings more than doubled to $ 720 million.
In addition to the quarterly figures, Netflix also announced an important personnel decision. Program director Ted Sarandos, who has been with the company for over 20 years, was appointed co-chairman of the board alongside Hastings and also has a seat on the powerful board of directors, which is superior to the board. The move officially makes what was already a de facto reality – namely, “that Ted and I share the leadership of Netflix,” Hastings justified the move.
Despite the promotion, Sarandos should continue to be responsible for the program selection of the streaming giant.