The Streaming Giant Keeps Going
Your resident Netflix critic and Netflix business model observer is back with the news today that Netflix made its numbers for the third quarter, in spite of having competition jumping around them like Virginia jackrabbits.
The streaming giant lost 130,000 subscribers in the U.S. and missed its 5 million target by 2.3 million subscribers in the second quarter. So, with those kinds of losses, you would expect that Netflix—as it transforms into HBO for the A.W.F.L “woke” generation—would continue to bleed.
Kind of like Superman in Batman v Superman.
From the trades:
The streaming giant, which now has 158 million total subscribers, on Wednesday reported that it added nearly 6.8 million members during the third quarter, 520,000 in the U.S. and 6.3 million abroad. That’s just slightly less than the 7 million subscribers that Netflix earlier forecast it would add during the three months from July to September.
Take that, white male, I.N.C.E.L.s who don’t watch shows on our platform anymore and who have canceled your subscriptions!
Claiming “Headwind Growth” Calms Investors
So, the CEO Reed Hastings got up in front of investors on Wednesday and addressed the yellow, blue, red, and black peacock in the room:
“Many are focused on the ‘streaming wars,’ but we’ve been competing with streamers (Amazon, YouTube, Hulu) as well as linear TV for over a decade.
The upcoming arrival of services like Disney+, Apple TV+, HBO Max, and Peacock is increased competition, but we are all small compared to linear TV.
While the new competitors have some great titles (especially catalog titles), none have the variety, diversity, and quality of new original programming that we are producing around the world.”
In other words, “We ain’t scared. Bring it on, Mouse House.”
Netflix Remains Financially Relevant for… ?
And then, to make matters even better — or worse, depending on your perspective on this stuff — Hastings and content chief Ted Sarandos mentioned one last thing when talking about Netflix’s film and content investments in the third quarter.
From the trades:
“…those films could be drivers of new sign-ups and help Netflix compete against the influx of new competition. “We haven’t that many big movies in the past,” he explained. “Movies are very valuable. People are used to paying a lot for that.” Sarandos later added, “These are big, theatrically ambitious type films that you’ll be able to watch on Netflix.”
In other words, “We ain’t scared. Bring it on, AMC, Regal, and all you other theaters who think you can beat us.”
The ups and downs of investment and finance matter a lot in entertainment and, in particular, the vagaries of content creation and distribution matter to investors a lot, in light of all of the competitors crowding Netflix’s space.
I still hold that Netflix is turning toward where they believe the money is and their future subscriber base: affluent, white, liberal, females who live in metropolitan areas, with small, niche nods through comedy specials and the occasional film to the remainder of us out here.
By the way, just to let you know how committed they are, Netflix is expected to spend $15 billion on content alone this year even as it expects to burn through $3.5 billion in cash.
So, Goblin streamer, in light of this stockholders’ meeting, what do you think? Will Netflix stumble along for a while longer, or will they wither away into a rump service?
Get after it off below.
