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Netflix (NFLX) Q2 2023 Earnings

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Netflix reports second-quarter earnings on Wednesday, and investors will be paying close attention to the streaming giant’s crackdown on password sharing, as well as its recently launched ad-supported tier.

Analysts are predicting — and some data sources have indicated — that Netflix’s subscriber base will get a boost from the spring rollout of its password crackdown.

Here’s what analysts expect for the quarter, according to Refinitiv:

  • income: $2.86 per share
  • income: 8.30 billion dollars

In May, Netflix began warning members about its new sharing policy, which prevents freebies from sharing accounts. Under the new policy, members can either transfer the profile to someone outside of their family so they can pay for their own account, or the account owner can pay an additional fee of $7.99 per person.

According to a report by Antenna, the number of Netflix subscribers increased within weeks of the rollout. Analysts from Wells Fargo and MoffettNathanson also expect an increase in subscribers.

According to analyst Stephen Cahall’s note this week, Wells Fargo is raising its second-quarter net gain estimate to 2.1 million from 1.5 million.

Investors will also be watching for any details from Netflix on its recently launched cheaper ad-supported tier. Netflix introduced both new sharing policies and ad levels last year in response to its first subscriber loss in more than a decade in 2022.

On Wednesday, Netflix confirmed that it has scrapped its “basic” ad-free plan, making the standard ad-supported plan the cheapest option at $6.99 a month. The ad-free Standard and Premium tiers cost $15.49 and $19.99 per month, respectively.

As these initiatives unfolded, Netflix stock rose. The company’s shares are up more than 60% this year and hit a 52-week high on Tuesday amid expectations for growth this quarter.

Media companies are increasingly turning to ad-supported streaming as a way to generate revenue.

During a presentation to advertisers in May, Netflix revealed few details about its ad-supported tier, though not enough to send its stock up. The company said it had 5 million active users of the new tier, and 25% of its new customers signed up for the tier in areas where it is available.

Also during the salary the main issue will be the consequences of the strikes of Hollywood writers and actors. As the media industry goes through one of its most turbulent times in years, actors recently joined writers on picket lines, nearly shutting down Hollywood.

Netflix is ​​expected to fare better than other media companies during the strike because of its vast amount of content, especially from international sources.

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