- Only 1.75 million subscribers in Q1
- Remains upbeat for the rest of the year
- First ever live music event launched
Streaming platform Netflix (NFLX: NASDAQ) said it added just 1.75 million new subscribers in the first three months of 2023, as it reported a 4% year-on-year increase in first-quarter revenue.
A year ago, Netflix lost 200,000 subscribers. Investors seemed unsure how to respond to the latest update with the shares falling over 10% at one point before rallying to close up 0.3% at $333.70.
Russ Mould, investment director at AJ Bell commented: ‘The choice may be vast on Netflix’s platform, but most people spend more time flicking through the selection, unsure what to watch, rather than watching something. If users’ appetite for something new cannot be sated, then they will naturally look at one of the other streaming platforms.
‘Netflix should really make it harder to cancel a subscription if it wants to hold onto customers, otherwise it’s all too easy to be lured by the competition.’
Despite this fall in numbers, the streaming giant remained upbeat for 2023.
Netflix said it was ‘on track’ to meet their full year 2023 financial objectives forecasting revenue of $8.2 billion up 3% year-on-year, or on a constant currency basis 6% growth.
The platform said: ‘We’re pleased with the most recent launches of paid sharing, and while we could have launched broadly in Q1, we found opportunities to improve the experience for members.
‘In short, we’re off to a good start in 2023. As always, our focus remains pleasing our members and attracting great creators so that we can continue to build a wildly successful business.’
NEW LAUNCHES
Netflix said its new launches proved successful across a variety of genres, including The Night Agent (now our 6th most popular English language TV show ever), La Chica De Nieve, Rana Naidu, and the movie Kill Boksoon all in the thriller/action space.
Other highlights included a new golf documentary series Full Swing and new dating show Perfect Match. These series are all being renewed for subsequent seasons.
Netflix also held their first ever live music event - Poguelandia - ‘to drive fandom’, with the title generating 2.2 billion social impressions to date, just ahead of You S4 with 2.1 billion.
WIND DOWN OF DVD.COM
In perhaps not a surprise move, but a sign of the times, Netflix announced the wind down of DVD.com later in the year after 25 years.
‘Our goal has always been to provide the best service for our members but as the DVD business continues to shrink that’s going to become increasingly hard. So, we want to go out on a high, and will be shipping our final DVDs on September 29, 2023.’
In another move to try and please existing and new subscribers Netflix announced a password sharing crackdown which has been trialled but not yet rolled out across the UK.
STREAMING WARS
The streaming platform pointed out that it faced competition from linear TV, gaming, user generated content, premium streaming content, social media, and the large tech companies who ‘continue to invest heavily in streaming, with a particular focus on live sports.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The editor of this article (Martin Gamble) owns shares in AJ Bell.
