Netflix attracts 10 million new subscribers but disappoints Wall Street

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Netflix plunged into the stock market Thursday after disappointing investors even as the streaming giant has attracted more than 10 million new subscribers seeking to distract themselves during the pandemic.

Since the beginning of the year, the platform has attracted a total of 26 million new paying subscribers, enticed by the thousands of hours of programs offered by Netflix when the Covid-19 forced many of them to stay at home. , closed movie theaters and canceled sporting events.

This is almost as much as the 28 new million members captured over the whole of 2019, notes Netflix which now has 192.95 million subscribers.

“However, as expected, growth is slowing as consumers recover from the initial Covid shock and restrictive measures,” said the group, which anticipates only 2.5 million new paying subscribers in the third quarter. .

In addition to this disappointing forecast, the Californian company also revealed profits below expectations.

Netflix certainly more than doubled its profits in the second quarter by earning $ 720 million. But adjusted per share, the benchmark for investors, earnings amount to 1.59 dollars where analysts expected 1.81 dollars. On Wall Street, the title lost about 10% in electronic exchanges after the official session.

The group notably had to cope with exchange rate effects and changes in tax terms.

Its turnover increased by 25% to reach 6.15 billion dollars.

– New boss –

Internet users particularly appreciated the series “My First Times” (“Never Have I Ever”) by Mindy Kaling and “Space Force” with Steve Carell as well as the reality TV shows Love is blind, High Voltage Seduction (Too Hot to Handle) and the game Floor is Lava.

In terms of movies, Da 5 Bloods by Spike Lee, Extraction with Chris Hemsworth and The Wrong Missy with David Spade worked particularly well.

The group also points out that it is “slowly” resuming the production of content worldwide.

Projects are already well underway in Asia and in a few European countries and Netflix has also restarted the production of two films in California and two animated films in Oregon.

But “the current trends on new infections create more uncertainty” on the projects in the United States, notes the group.

As production times are fairly long, the original show and movie launches slated for 2020 have largely remained intact, says Netflix.

For 2021, the group anticipates that the number of outings will be the same but that they will be more concentrated in the second half.

The group is not particularly worried about this delay.

“The pandemic and production breaks have a similar impact on our competitors and our suppliers. With our large library of thousands of strong titles and recommendations, we think our members will remain satisfied,” he said.

Competition has become fierce between Amazon Prime Video, Disney +, Apple TV +, HBO Max and the recent Peacock from NBCUniversal.

“In addition, the growth of TikTok is mind-blowing, demonstrating the fluidity of entertainment on the Internet,” said the company with reference to the application popular with young people.

“The pandemic and the restrictions that accompanied it have dramatically accelerated the transition from television to streaming video,” said Eric Haggstrom, analyst for eMarketer. “Even if the containment is relaxed and new competitors begin to expand their services, Netflix will stay ahead as the leading entertainment provider,” he predicts.

The group does not depend on sport, live events or advertising and unlike other newcomers to the market, does not “have to manage the delicate balance between the sale of content to historic partners or the uploading content to a new streaming service, “said the specialist.

Netflix also announced Thursday that Ted Sarandos, currently in charge of content, has been named co-chief executive alongside co-founder Reed Hastings.

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