According to reports, Netflix will release its second-quarter 2021 financial report later today. At that time, its subscriber growth trend will attract attention. Due to increasing competition from rivals such as Disney+ and HBO Max, and the fading of the driving factors of the COVID-19, the growth of Netflix subscribers has shown a slowdown.
Netflix previously predicted that in the second quarter of this year, it will only add 1 million subscribers worldwide, only 1/10 of a year ago, when the new crown pneumonia epidemic forced people to stay at home and entertain themselves.
Today, Netflix’s market share is gradually being eroded by new streaming services such as Disney+, Apple TV+, WarnerMedia’s HBO Max, and Comcast’s Peacock. To be sure, as the US market becomes saturated, the industry’s overall subscriber growth will slow down.
Some Wall Street analysts believe that Netflix’s first-mover advantage will end here. The company needs to produce new content, renew content licenses, and explore other sources of revenue such as live sports and advertising to drive continued growth.
But Netflix co-CEO Reed Hastings has long opposed the adoption of the advertising model, saying that if the advertising model is adopted, Netflix will have to compete with market leaders Google, Facebook and Amazon. On the contrary, Netflix is exploring the development of e-commerce to sell content-related goods. Recently, Netflix also hired Facebook executive Mike Verdu (Mike Verdu) to promote its game expansion.
But this strategy has been questioned by analysts. Matthew Thornton, an analyst at Trust Securities, said: Although this strategy may play a role in boosting Netflix’s membership and revenue growth, whether Netflix can compete with mainstream gaming platforms in the short term Or content publishers have meaningful competition, we doubt it.
For the second-quarter results, analysts expect Netflix’s revenue to reach 7.32 billion U.S. dollars, a year-on-year increase of 19%. Among them, North America (its largest market) revenue will increase by 13.4%. Diluted earnings per share will reach $3.16. So far this year, Netflix’s stock price has fallen by 1.5%, while last year it has grown by 67%. Currently, Netflix’s stock price is approximately $532.30, and the average target stock price given by analysts is $620.