Is Netflix The Canary?
Analysts expected Netflix to add 2.5 million subscribers in the latest quarter. The company actually lost 200,000 instead. Uh oh...
I don’t know if you guys are aware of just how much I dislike Netflix (NFLX). Back during my “on Twitter” days, I used to dog that stock all the time. And all the time the stock would rally higher anyway. Such is life when you’re a contrarian to a fault. But hey, I think I spawned a cool publication title out of being a contrarian, right? You don’t have to answer that.
My loathing of Netflix hasn’t just been limited to just the business model. Even though I can’t stand spending billions to borrow somebody else’s content in the face of a macro trend shift that figures to reward the direct to consumer model, I just don’t like most of the content I watch on Netflix either. The company smartened up a bit a few years back and began investing in content that it actually had long term control over.
The standup comedy specials are good. I like some of the docuseries titles. The rest? Meh. The scripted shows and movies are not great, in my humble opinion. Even the ones that people seem to like don’t do it for me. Seen The Adam Project? They warn you right away the movie is about time travel and even after that generous suspension of disbelief demanded from the viewer from the jump, the movie still has so many plot holes that its difficult to recommend it.
But anyway, I’m getting off topic. Netflix reported earnings after market hours this evening and the subscriber number is concerning. Analysts expected growth in the 2.5 million range. Instead, Netflix lost 200,000 subs and is forecasting an additional 2 million subscriber decline in the Q2-22 report. The stock is down 25% after hours as of typing and taking a bunch of other streaming names down with it. That is a pretty intense subscriber miss and it probably requires some unpacking.
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