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CEO Reed Hastings of the global market leader in coma viewing remains calm: “We are largely competing with ourselves to improve our offering as quickly as possible.”
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More striking: in the US home market, growth seems to have come to a halt, now that a proliferation of streaming services is available and the reopening of the economy makes forms of ‘outdoor’ entertainment available again. Netflix saw 430,000 subscribers leave in North America and now has just under 74 million.
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That home market matters, even though nearly two out of three of the more than 200 million subscribers are now elsewhere in the world. North America remains the most lucrative market: Netflix generates a monthly income of $14.54 per American, significantly more than Europe ($11.66), Latin America ($7.50) or Asia ($9.74).
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Hastings blames the slump at the end of the pandemische boom in comakijken home and the ‘traditionally weaker quarter in the spring’. In the second quarter of 2019, Netflix also saw – then for the first time since 2011 – Americans quit. “Since then we have gained 7.5 million subscribers in North America,” it sounds dry.
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In the – always fluently written – shareholders letter in typical combative style, Hastings is far from concerned about the stalling growth, which has also brought the stock price to a halt after a blistering ride (see chart). He refers to the deal fever in the sector with the acquisition of Hollywood studio MGM by Amazon and merger between Warner Media and Discovery. ‘These mergers have little impact on our growth. We don’t feel like taking part in it.”
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As is often the case, Hastings emphasizes that in the battle for ‘screen time’ rivals such as YouTube and Epic Games are at least as important. But Netflix’s main rival is Hastings Netflix itself. ‘We mainly compete with ourselves to improve our offer as quickly as possible. If we can do that, we will continue to grow as well as in previous decades’.
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The mergers in the sector have little impact on our growth. We don’t feel like participating in it
Reed Hastings
Netflix-CEO
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Hastings predicts 3.5 million new members for the summer quarter. “If we get to that level, we’ll have 54 million additional members in the past two years, or 27 million a year. That is in line with our annual growth before the corona pandemic.’
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Revenue grew 19 percent in the second quarter to $7.34 billion, mainly driven by an 8 percent increase in average revenue per user. Net earnings per share were $2.97 compared to $1.59 a year ago. Analysts expected earnings per share of $3.16.
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