“We’ve shown that with discipline and a focus on the long term, you can build a strong, sustainable streaming business,” the company said in a letter to shareholders.© Copyright 2023 Public Holdings, Inc. On Wednesday, the company also announced a deal to release animated films produced by David Ellison’s Skydance Media. Suits, a series that first aired on USA Network, was the most-watched program on streaming all summer thanks to viewing on Netflix. Netflix’s biggest hit in the quarter wasn’t an original though. The company released new seasons of the hit shows Virgin River and Heartstopper and created new hits such as the manga adaptation One Piece. This includes about $1 billion less in spending on content due to the strikes.īut the labor stoppage has had little impact on Netflix’s release schedule because many programs were already completed. Management expects $6.5 billion in free cash flow this year, up from a prior forecast of at least $5 billion. The company also said profit margins would improve to at least 22% next year and have the potential to grow further in the years ahead.Ĭash flow was boosted by the labor stoppage in Hollywood. Earnings rose to $3.73 a share, beating estimates of $3.56, while revenue grew 7.8% to $8.54 billion, slightly ahead of forecasts. On the other hand, Netflix reported third-quarter revenue and profit that exceeded Wall Street expectations. But most of the newer streaming services lose money. They have spent billions of dollars to fund new streaming services that can replace their declining linear TV networks. and Paramount Global have all cut costs and fired staff to improve their financial performance. Walt Disney Co., Warner Bros Discovery Inc. Netflix has returned to growth as many of its peers struggled to figure out their streaming operations. About 30% of new customers in those markets opted for ads last quarter, the company said. The company also rolled out an advertising-supported version of its streaming services in 12 markets. “We’re incredibly pleased with how it’s been going,” co-Chief Executive Officer Greg Peters said in a videotaped interview released after results came out.Ĭracking down on password sharing is one of a couple major initiatives at Netflix, which is trying to revive growth after a sluggish year or two. The benefits of the password crackdown will continue over the next several quarters because Netflix has been implementing the plan in stages. It’s taking similar steps in the UK and France, two other large markets. Starting Wednesday, the company is increasing the cost of its most expensive plan in the US by $3 to $23 and its basic plan by $2 to $12, while keeping two other plans the same. The successful rollout of paid sharing, which lets customers purchase additional access for friends or family, has emboldened Netflix to raise prices in some of its biggest markets. They were up more than 17% this year through the close of regular trading Wednesday, beating the 12% gain for the S&P 500 Index. Shares of Netflix rose as much as 13% to $392 in extended trading after the results were announced. Netflix is now on track to add more than 20 million customers this year, a big jump from fewer than 9 million in 2022. But the crackdown has led to a surge in new customers without a major increase in cancellations. Investors have worried that Netflix might lose customers if it forced people who were sharing accounts to buy their own subscriptions.
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