Netflix adds 1.75 million new subscribers in Q1 2023 after crackdown on ad-supported level password sharing
Netflix on Tuesday reported first-quarter revenue and profit roughly in line with Wall Street expectations, but offered a forecast below analysts’ estimates for the next three months.
The streaming video pioneer has started reaping the benefits of a crackdown on password sharing and the introduction of an ad-supported tier.
From January to March, Netflix posted diluted earnings of $2.88 (around Rs 236) per share, against a Wall Street forecast of $2.86 (around Rs 234). The company posted revenue of $8.162 billion (about Rs.670 crore), as estimated by analysts at Refinitiv.
Looking ahead, Netflix forecasts $8.242 billion (approximately Rs.676 crore) in revenue and $2.86 (approx. Rs.236 crore) in diluted EPS for the second quarter. Wall Street had forecast $8.476 billion (about Rs.696 crore) for revenue and $3.05 (about Rs.250) for diluted EPS.
Netflix serves as a barometer for the streaming industry, in which growth has slowed as competition has intensified.
The company added 1.75 million subscribers in the quarter, missing analysts’ estimates of 2.06 million additions.
A year ago, Netflix lost 200,000 subscribers – its first drop in subscribers in more than a decade, sending its stock tumbling and resetting Wall Street expectations for the industry.
The March quarter lacked major releases with non-English shows such as Korean revenge drama “The Glory” and the third season of Mexican drama “La Reina del Sur” doing well, according to Jefferies.
Netflix faced strong competition from Walt Disney, Amazon.com and Warner Bros. Discovery. Amazon knocked Netflix out of the top spot in the US last year, according to consultancy Parks Associate.
Netflix launched an ad-supported streaming plan in November for $6.99 (around Rs 574) per month in 12 countries, after resisting ads for years. Disney’s Hulu and Disney+ and HBO Max already have ad-supported options.
© Thomson Reuters 2023
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