Tim Nolen, senior media technology analyst at Macquarie, explains why Barney & Co. has significantly increased its price target for Netflix.
Netflix showed its crackdown on password sharing continues to pay off, delivering its strongest customer growth in the first quarter since the pandemic, further strengthening its position as the dominant global streamer.
The company added 9.33 million subscribers in the first quarter, more than five times the number of customers in the same period last year, and its efforts to limit password sharing continue to pay off. Netflix began seriously restricting password sharing about a year ago.
Netflix’s crackdown on password sharing is working. (Nikos Pekiaridis/NurPhoto via Getty Images/Getty Images)
Over the past year, Netflix has limited account sharing, sought to expand its advertising business, changed its pricing lineup and made plans to better position itself for future growth. The company plans to stop providing quarterly membership and average revenue per member to investors early next year and add annual revenue guidance, as the company currently has multiple price points in different markets. is.
Netflix ended the first quarter with 269.6 million paying customers worldwide and announced it now has more than 500 million viewers.
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The company continued its string of hit original TV shows earlier this year, including the sci-fi blockbuster “Three Body Problem,” the latest season of the reality series “Love is Blind,” the TV drama “Griselda,” and even movies like “Damsel.” It was delivered. and Irish Wishes.
The streamer continues to grow as competitors like Disney and Paramount strive to make their streaming services more profitable. While some traditional entertainment companies are cracking down on password sharing and improving their recommendation engines, Netflix is already benefiting from such product features.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| DIS | walt disney company | 112.43 | -0.51 | -0.45% |
| para | paramount global | 10.97 | +0.16 | +1.48% |
“We have built a strong foundation, great recommendations, broad reach and passionate fandom – a combination that is difficult to replicate,” the company said in a letter to shareholders. Netflix said it must continue to improve the variety and quality of its programming, as well as product features and marketing.
The company’s stock has risen by about 30% since the beginning of the year ahead of the earnings report. Shares fell more than 4% in after-market trading Thursday.
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Netflix’s subscriber growth through March was slower than last year’s fourth quarter, when it added 13.1 million subscribers, but remained strong and exceeded the expectations of some Wall Street analysts. Due to seasonality, we expect net customer additions in the second quarter to be lower than in the first quarter.
The Netflix logo appears at the Netflix offices in Los Angeles, California on July 19, 2023. (Photo courtesy of Mario Tama/Getty Images/Getty Images)
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| NFLX | Netflix Co., Ltd. | 611.15 | -2.54 | -0.41% |
The company reported first-quarter sales of $9.37 billion, up about 15% from $8.16 billion in the same period last year and beating its own expectations for the same period. Net income for the quarter rose nearly 80% to $2.33 billion, beating company estimates of nearly $2 billion.
Netflix said it must continue to improve the variety and quality of its programming, as well as product features and marketing.
The service is now able to offer subscribers an increasingly diverse range of products, from cozy watches featuring familiar shows and movies from the past to flashy new releases. While Netflix originals remain attractive to subscribers, the distributor’s rivals are now licensing more hit shows and movies from their own libraries, including “Gossip Girl” and “Young Sheldon.” They are willing to give permission.
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Netflix continues to focus on live events, this year with the annual Screen Actors Guild Awards and the company’s first live tennis match, The Netflix Slam, starring champions Rafael Nadal and Carlos Alcaraz. It’s live streaming. Earlier this year, Netflix announced it had signed a $5 billion, multi-year deal with WWE.
Last month, the company announced it would livestream a boxing match between Mike Tyson and influencer-turned-boxer Jake Paul in July.
