After a tough first half of the year, optimism seems to be returning to Netflix. The year 2022 started badly for the Californian company with a significant loss of customers and a sharp drop in the value of its shares. Fortunately for the platform, its third quarter results have been much more positive and it is recovering both on the stock market and in terms of the number of customers.
A difficult first half of the year
The main investment portals, which in addition to crypto trading, forex and other securities, focus on shares and CFD’s, reflected in their charts a violent fall in the shares, at the beginning of this year, of the main technology companies, such as Google, Amazon or Netflix itself. This phenomenon occurred on the basis of an adjustment in the value of these stocks, but its impact was very marked. Things took a turn for the worse for the California-based platform when it presented its first quarter results, with a drop of 200,000 users, when the trend, until then, had been one of growth. Netflix shielded itself from the conflict situation in Europe, but many suspected that the streaming content sector was too saturated and was facing a change in trend that would be difficult to correct.
In the second half of the year, the figures took a turn for the worse, with a loss of 2 million customers globally, further dragging down the “Big N” company’s negative outlook. Investors expressed their fears and turned to other stocks for their money, which led to a rise in the number of queries to forex broker reviews and other specialized trading portals to decide where to focus their investments. However, the third quarter figures have been surprisingly positive, with new subscriptions in this period reaching 2.4 million new users, leaving behind a period of declines to make up for losses and even increase its overall number of affiliates.
Turnaround measures
At a time when Netflix was facing its worst results, a series of initiatives were taken to slow its decline. On the one hand, cost-cutting, limiting the number of major in-house productions, but also with an adjustment of its workforce. On the other hand, the idea was born of launching a subscription with a lower fee but which could contain advertisements and some other limitations (such as downloading series and films for later viewing offline). Also, serious consideration was also given to the idea of prosecuting those who share their password, although this initiative is still up in the air. All these measures seem to have been reflected commercially and sales have increased considerably.
It is also true that a large part of the new subscribers is located in Asia, and the reasons for their joining Netflix would be due to the launch of some series that are having a real success in that region. In fact, the inclusion of advertising in one of the fees that is being introduced does not convince many experts, especially because the savings are not that great; however, it could prove to be a gateway for new customers who would then switch to other ad-free modes.
Competition continues
One way or another, the fact is that Netflix is celebrating its new results and this gives them some oxygen in the face of the fierce competition they face in a sector they still lead, to this day. However, the saturation of options and the alliances that its main competitors are forging with some production companies continue to be a concern for the Californian company. To continue to reign in this market it will need to be very creative with its catalogue content and achieve more of the successes it has achieved with products such as “The Crown”, “The Squid Game” or, more recently, “Dahmer”. At the same time, big feature film productions, with big investments and big salaries for their protagonists, may not be the best choice for the near future.
