Under pressure to reduce their losses, various companies dedicated to producing entertainment content have decided to sell more of their content to Netflix, as Disney did earlier this year. After the well-known platform for streaming movies and series outperformed its competition in delivering content to its audience, the focus has shifted to the advertising battle, and the question that hangs in the air is: will Netflix succeed in this endeavor?
The company remains the undisputed leader in video content streaming. Last week, the platform gained another significant number of subscribers and revenue, adding over 8 million users in the period from April to June. Revenue rose to $9.6 billion, a 17 percent increase, while net income jumped by nearly a third.
The increase in numbers was fueled by the company’s decision last year to ban password sharing for access to the platform and the introduction of a cheaper ad-supported subscription. Hit series like Bridgerton and Baby Reindeer have also attracted new users.
At a time when rival platforms struggle to attract users and achieve profitability, Netflix, with its 27 percent operating margin and strong free cash flows, is the envy of many similar platforms. Shares, which have risen by 35 percent in the past 12 months, reached a new all-time high this month. With about 30 times the earnings, it has an advantage over competing streaming operators. However, the increase in subscribers due to the ban on password sharing cannot last indefinitely. User growth will slow down. This could happen as early as the next quarter, with tougher comparisons from last year. Netflix plans to stop reporting quarterly subscriber numbers starting next year.
