Netflix's second quarter financial report was released: subscribers lost nearly one million

21st Century Economic Herald Profile Reporter Dong Jingyi Shanghai Report

The loss of nearly one million users is less than half of its previous prediction, which seems to have become good news for Netflix.

After the US stock market on July 20th, Netflix announced the second quarter of fiscal year in fiscal year. According to the financial report, from April to June this year, Netflix lost about 970,000 subscribers. Because of the 2 million users who had previously predicted, Netflix's stock price increased by more than 8%.

Other data are quite satisfactory. The financial report shows that Netflix's total revenue in the second quarter was US $ 7.97 billion, an increase of 8.6%year -on -year; net profit recorded $ 1.441 billion, an increase of 6.5%year -on -year.

Since the decline in the stock price last quarter and the company's significant layoffs, Netflix has received great attention. With the end of the growth bonus brought by the epidemic home, Netflix also needs to find new growth points.

Farewell to the myth

In the first half of 2022, it was not friendly to Netflix.

Loss of 200,000 subscribers in the first quarter, this is the first negative growth in subscription since the establishment of Netflix. In the next day, the stock price of Netflix plummeted by 35%, and the market value evaporated by 50 billion US dollars.

The company said that competitors' increasingly fierce competition, account sharing between family friends, and slower economic growth are the causes of reduced subscriptions.

In the second quarter, 970,000 subscription loss was reached a new high, but the number was far lower than the previous predicted 2 million, in part of the reason, the new season's popular drama "Strange Story" was launched. In addition, the company also said that it will increase another 1 million users in the third quarter. Based on the good performance of each data, Netflix's stock price rose more than 8%in the post -trading transactions, but it still fell nearly 70%compared to the beginning of the year.

According to the financial report, the largest user of Netflix in the second quarter was lost from the United States and Canada with 1.3 million users, which is also its largest market. In Europe, the Middle East and Africa markets, a total of 800,000 users have been lost. The only growth comes from the Asia -Pacific region. 1.1 million users in the quarter.

For Netflix, with the revenue = user number X subscription fee as the core logic, it is difficult for investors to not make investors doubt the company's continuous growth capabilities. In the second quarter financial report, although revenue and net profit were quite satisfactory, there was a significant gap in the year -on -year growth rate. Data show that Netflix's net profit in the second quarter of last year increased by 87.9%year -on -year, much higher than this year's data.

On Tuesday, local time, in a letter to investors, Netflix acknowledged that re -accelerating its growth would be "a huge challenge", but defended its "streaming leader" position. It is reported that at the end of the second quarter, the company had 220.7 billion users worldwide, far ahead of its competitors.

How to reverse?

Reed Hastings, a joint CEO and founder of Netflix, has been opposed to advertising before because it is worried that it will affect the user experience. Gao Leng, like Netflix, is now facing difficulties and has to seek new growth through advertising low -cost services.

Disappointed by users in the first quarter, Netflix said that in order to attract more user registered members, the company will launch a member service that inserts ads to watch videos and cheaper prices.

At the beginning of July, Netflix officials, as a new advertising service provider, said in a statement, "Microsoft has mature capabilities to support all of our advertising needs. More importantly, Microsoft provides long -term technology and sales in terms of technology and sales. The flexibility of innovation, and the strong privacy protection of our members. "

This will also bring a change in the entire business model of Netflix, that is, from the simplest subscribing video on -demand to hybrid mode, compared to competitors such as Apple TV+, Disney+, which are already on multi -level members and advertising, Netflix does not occupy Advantage. At the same time, the low -cost service plan given by Netflix is ​​not specific, and even does not even hire professional advertising sales executives. It can really help Netflix to gain growth.

In addition, Netflix will also hit the issue of account sharing, and its latest measures are "adding families" are currently being tested in Argentina, the Republic of Dominica, Salvador, Guatemala and Honduras. Under this initiative, a family of each account, if you want to use your account in an additional residence, you need to pay an additional fee.

According to the company's estimation, more than 100 million Netflix families are sharing passwords. Previously, the company had stated that the "password sharing" behavior has destroyed their long -term capabilities of their investment and improvement services.

Netflix said that the above two services may be deployed next year.

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