Netflix wrapped up Q2 with over 209 million subscribers, but still missed on earnings

[Shawn Knight]

In brief: Netflix finished the second quarter of 2021 with more than 209 million subscribers but missed the mark slightly in terms of earnings, generating $7.34 billion in revenue. A Refinitiv survey revealed that analysts were collectively expecting $7.32 billion, so not too far off. Earnings per share checked in at $2.97 versus the $3.16 that analysts were anticipating.

In its letter to shareholders, Netflix said it had 209.18 million subscribers at the end of the second quarter, an increase of 1.54 million over the 207.64 million it reported for the first quarter. According to Street Account, analysts were expecting just 1.19 million net subscriber additions.

Netflix said the pandemic has created some “lumpiness” in their membership growth, resulting in higher growth in 2020 and slower growth so far this year. Nevertheless, the company said it will continue to focus on improving its service for members and bringing them the best stories from around the world.

Looking ahead, Netflix said it is expecting to finish the third quarter with 212.68 million subscribers and bring in around $7.47 billion in revenue. According to Street Account data, analysts were anticipating closer to 5.46 million net subscriber additions for the three-month period, largely due to Netflix’s upcoming content slate.

Netflix’s stock is down 3.78% on the news as of writing.

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https://www.techspot.com/news/90512-netflix-finished-second-quarter-more-than-209-million.html

 

[duckofdeath]

"...missed the mark slightly in terms of earnings, generating $7.34 billion in revenue. A Refinitiv survey revealed that analysts were collectively expecting $7.32 billion..."

 

[DukeJukem]

Peacock is where its at

 

[franticfrosty]

If analysis were expecting something different, maybe its just because they're dumb af lol

 

[Dimitriid]

I bet most of the dip will come from people who decided they can't affford Netflix AND Prime AND HBO AND Disney plus all wanting their own subscription.

It is seriously almost as pathetic as cable TV was before everybody started cutting the cords. Guess what? Enjoy it while it last because Milennials are probably the last age group that still even cares about tv shows and movies you have to pay for, Zoomers will probably just watch youtube & twitch for leisure and they're certainly not going to care all that much and for long enough to sustain stable monthly subscription levels.

Sad part is that I know other people know this so the days of "Anyone can watch youtube/twitch for free" are coming to an end in the next few years. And I don't mean just optional "Look support your content creators, pay to have no ads!" schemes but full on sequestering of content behind more and more paywalls.

 

[Austinturner]

I bet most of the dip will come from people who decided they can't affford Netflix AND Prime AND HBO AND Disney plus all wanting their own subscription.

It is seriously almost as pathetic as cable TV was before everybody started cutting the cords. Guess what? Enjoy it while it last because Milennials are probably the last age group that still even cares about tv shows and movies you have to pay for, Zoomers will probably just watch youtube & twitch for leisure and they're certainly not going to care all that much and for long enough to sustain stable monthly subscription levels.

Sad part is that I know other people know this so the days of "Anyone can watch youtube/twitch for free" are coming to an end in the next few years. And I don't mean just optional "Look support your content creators, pay to have no ads!" schemes but full on sequestering of content behind more and more paywalls.

Cost of processing, storing, backing up and serving for twitch/youtube is very real and creators want some return. If a customer expects to be provided a 10hrs of 4k streamed content with high reliability and performance that only 100 other customers also want, they are going to have pony up a decent amount of cash to cover all the costs at some point in some way (through ads/ subscription/ direct payment/ loyalty leading to other purchases). If the same content is desired by 100,000 customers that cost is a thousand times lower so popular content is going to be more affordable to provide.

Platforms can ignore economics for growth for quite a while using external investment, but a return has to be there eventually or it is a charity.

 

[Dimitriid]

Cost of processing, storing, backing up and serving for twitch/youtube is very real and creators want some return. If a customer expects to be provided a 10hrs of 4k streamed content with high reliability and performance that only 100 other customers also want, they are going to have pony up a decent amount of cash to cover all the costs at some point in some way (through ads/ subscription/ direct payment/ loyalty leading to other purchases). If the same content is desired by 100,000 customers that cost is a thousand times lower so popular content is going to be more affordable to provide.

Platforms can ignore economics for growth for quite a while using external investment, but a return has to be there eventually or it is a charity.

It's not that difficult to manage the cost actually and we know this due to the continued success of peer-2-peer models.

It's just very hard to also tightly control copyright on such a platform. The truth is that an alternative, free platform could develop but it would be legislated into oblivion because the RIAA and MPAA would claim even half a second of what they think they're entitled to, ignoring all fair use provisions and just sink the platform with literal persecussion. We know this because this is what happened to the pirate bay organizers, people assume they wouldn't go as hard to a platform that tried a bit to curve down pirated content but I am certain they would: we already seen people get legal threats to people transferring 100% legit uses like Linux distributions just because they're on bit torrent form which tells me a descentralized protocol is what they want to make sure doesn't becomes the norm, not the actual content being transferred possibly having some manner of copyright to watch over.

 

[Austinturner]

It's not that difficult to manage the cost actually and we know this due to the continued success of peer-2-peer models.

It's just very hard to also tightly control copyright on such a platform. The truth is that an alternative, free platform could develop but it would be legislated into oblivion because the RIAA and MPAA would claim even half a second of what they think they're entitled to, ignoring all fair use provisions and just sink the platform with literal persecussion. We know this because this is what happened to the pirate bay organizers, people assume they wouldn't go as hard to a platform that tried a bit to curve down pirated content but I am certain they would: we already seen people get legal threats to people transferring 100% legit uses like Linux distributions just because they're on bit torrent form which tells me a descentralized protocol is what they want to make sure doesn't becomes the norm, not the actual content being transferred possibly having some manner of copyright to watch over.

Yes, and I would add that creators would also find it impossible to monetise their content on peer-peer without control of distribution and analytics and impact measurement.

I think a great model is podcasting with an open hosting approach with third party consumption tools, unfortunately the costs are far far higher for video and makes that impractical, most podcasters today can ignore cost to serve. Also podcasting only really survived this way because apple podcasts supported audience volumes on an open platform for years.

 

[cliffordcooley]

creators would also find it impossible to monetise their content on peer-peer without control of distribution

Not impossible!
Netflix could create their own peer-to-peer application that encrypts everything. That way no other application could read downloaded files. An application that requires an account login to manage any downloads/uploads. An application that changes its encryption cypher upon updating. This would also ensure the use of an updated client. Difficult but certainly not impossible.

 

[Dimitriid]

Yes, and I would add that creators would also find it impossible to monetise their content on peer-peer without control of distribution and analytics and impact measurement.

I think a great model is podcasting with an open hosting approach with third party consumption tools, unfortunately the costs are far far higher for video and makes that impractical, most podcasters today can ignore cost to serve. Also podcasting only really survived this way because apple podcasts supported audience volumes on an open platform for years.

I don't disagree with the above part, I just think that people underestimate the appeal of amateur video content: this is what made youtube their initial numbers: it wasn't production values at all it was just a large meme machine and soap box everyone could get on to.

In this sense, I hold the somewhat controversial opinion that degrowth from the ever increasingly produced youtube content we see today wouldn't be a bad thing.

Alas this is not something that we need to be too intentional about however: things will naturally align as they have been: Youtube monetary aims encourage and mold ever increasingly better produced content while the realities of the revenue model come crashing down to either fully turn youtube into another version of syndicated TV that can be heavily supported by advertiser or implodes due to lack of quality content that can't come fast enough for the massive user base it has today: no matter how many billion views K Pop stars and big youtubers can bring to the table, people stay on youtube because of the smaller content creators while youtube is molding into a platform that's actively hostile to them.

They'll naturally leave or be forced out, scale back, seek alternative platforms and then as the profits dwindle due to this cycle the smaller truly amateur video content has a reinassance on some other site white Youtube, Twitch, etc. Continue to struggle of being too big to support their own weight.

 

[zamroni111]

In many country outside usa, hbo, disney and amazon are much cheaper than netflix.
For example in indonesia: netflix $11, disney $3, hbo $4, amazon $3

 

[drjekelmrhyde]

Peacock is where its at

I won't lie it's the best of the free/cheap ad supported ones. Only 5 minutes of ads per hour, kills $4.99 a month Hulu.
Netflix is doing what every other media, cell, and ISP's are doing. Trying to appeal to investors by adding new subs(which will ditch them when the next big thing happen) instead of trying to keep their bread and butter (loyal subs).

 

[Austinturner]

I won't lie it's the best of the free/cheap ad supported ones. Only 5 minutes of ads per hour, kills $4.99 a month Hulu.
Netflix is doing what every other media, cell, and ISP's are doing. Trying to appeal to investors by adding new subs(which will ditch them when the next big thing happen) instead of trying to keep their bread and butter (loyal subs).

I disagree, Netflix’s content investments are massive and mostly aimed at increasing their content library to both add new subscribers AND retain existing subscribers. If they only wanted to add new subscribers they would spend a lot more money on marketing and customer acquisition and less on content.

 

[Cubi Dorf]

I am disapprove. I am pay for video content. Not mobile game. If I want mobile game then I will subscribing to that.