CCN.com previously reported that Netflix (NASDAQ:NFLX) saw a potential peak in subscriber growth in the United States. The streaming platform was already looking to their next quarterly earnings report, which was published on Oct 16. 2019, to reassure investors that the brand still had opportunities for growth.
The quarterly report revealed that Netflix expects to add 7.6 million subscribers in the fourth quarter. This is likely due to recent hits such as ‘Stranger Things’ and ‘El Camino: A Breaking Bad Movie.’
NASDAQ currently has NFLX stock at a 1% increase after these reports. While this is promising, these numbers are perhaps not enough to protect the platform from the launch of Disney+, which we have predicted to affect Netflix’s subscriber base and lead to a ‘streaming war.’
Despite industry predictions, the company has released a statement suggesting they are not concerned with other platforms. They stated:
“We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on demand entertainment is so massive and because of the differing nature of our content offerings.”
The confidence of Netflix hasn’t stopped them from taking precautionary measures to ensure continued growth over the next year. During their conference call they revealed details of a new plan to crack down on ‘password sharing.’
According to the New York Post production chief Greg Peters stated that the company is continuing to monitor the situation although it has no big plans to announce yet.
It’s interesting that tackling ‘password sharing’ is on the agenda for Netflix. While giving passwords to friends and family is a well known habit of many subscribers, it’s difficult to say how this affects subscriber growth. There are already measures in place to tackle this, such as limiting the amount of devices Netflix can be used on.
However, there’s every possibility that if Netflix does struggle in the ‘streaming wars’ they may employ this strategy to help reduce the number of users per account. This would in theory ensure an increase in subscriptions, although in actuality numbers may remain the same while ratings for content will decrease.
Netflix will be running impact assessments before announcing anything significant regarding ‘password sharing.’ This is an ongoing process and we could expect some announcements to be made on the next quarterly earnings report, after the release of Disney+. For now, at least, Netflix accounts will remain the same.
Last modified: September 23, 2020 1:11 PM