The streaming giant Netflix was able to attract fewer new users with its series and films in the second quarter than ever before in a quarter. In the three months to the end of June, the number of subscribers worldwide increased by only 1.5 million to a total of a good 209 million, as the company announced on Tuesday after the US stock market closed. The forecast for the current quarter was also relatively meager with 3.5 million new customers. The streaming market leader is under pressure from increased competition and now wants to expand into new markets.
Netflix boss Reed Hastings does not believe that people will lose interest in streaming after the pandemic. "The growth story remains intact, at least for the next few years," he said in a video interview after the quarterly report was presented. Hastings is also not afraid of streaming competitors like the Hollywood giant Walt Disney and other financially strong rivals like WarnerMedia with the popular pay channel HBO or Amazon, who want to strengthen themselves through mergers and acquisitions. "We don't see any major headwinds from new streaming competitors."
Netflix was able to score with some productions in the past quarter. For example, the second season of the French crook series “Lupin” was a hit, accessed by 54 million user accounts in the first week alone. However, such successes paled in comparison to the streaming boom that the Corona crisis triggered in 2020. In the same period last year, when many people were stuck at home due to the pandemic, there was a real rush on Netflix. In the first half of 2020, the company had recorded rapid growth of over 25 million new users.
Pandemic distorts the numbers
The pandemic has led to an unusual distortion of the numbers, Netflix wrote in the letter to shareholders. On the other hand, from a financial point of view, the quarter went far better than a year ago. Net income rose nearly 90 percent to $1.4 billion and revenue grew 19 percent to $7.3 billion. Due to production problems caused by the pandemic, it was actually clear that this time the really big blockbusters were not to be expected. But when it came to the outlook, analysts had expected more. This caused the share to drop sharply in an initial reaction after the trading hours, but the price quickly recovered.
In addition to the main business with streaming, Netflix is increasingly setting the course to penetrate new markets. In June, the television pioneer opened an online shop for fan articles on the Internet. The offer is still small, but in the long run Netflix could open up a significant additional source of income through merchandising, following the example of its big competitor Disney. After the signing of gaming expert Mike Verdu from Facebook, plans for an attack in the video game business are also becoming more concrete. "We're in the early stages," Netflix said.
The company confirmed a plan, recently reported by financial service Bloomberg, to make games available on Netflix's streaming platform at no additional charge. The trend of running video games on servers in the network and letting users play on all kinds of devices via streaming via the Internet is currently gaining momentum with offers from Microsoft, Google and Nvidia, among others. Hastings has been emphasizing for years that Netflix not only competes with other streaming providers, but also with social media, YouTube and many other forms of digital entertainment.
dpa/tel
