Old media companies catching up to Netflix

Netflix, once a booming upstart in the TV industry, has now become the king of streaming media, with 208 million subscribers-not including China, accounting for nearly half of the global total. However, the latest round of the media company’s quarterly results ended Thursday night with Disney’s data. The quarter’s results show that disruptors have now firmly assumed the role of defensive incumbents. But prosperity is not the same as bending over, so the rest of the year is crucial. “Hargreaves Lansdown (Hargreaves Lansdown) stock analyst Sophie Lund-Yates (Sophie Lund-Yates) warned. “The pandemic performance is impressive, but anyone can Making hay when the sun is shining”. “We can’t detect any real changes.” Netflix has added less than 4 million subscribers worldwide in the first three months of this year, which is far below its own expectations.

In the two largest markets, the United States and Canada, only 450,000 people registered. Netflix co-founder Reed Hastings (Reed Hastings) released these data last month, largely avoiding threats from competitors and told investors: “In a competitive environment, We have not found a real change.” But Disney Plus attracted 9 million subscribers during the quarter, while ViacomCBS added 6 million, and HBO signed nearly 3 million U.S. subscribers in its Max streaming service. In the past year and a half, Disney, Apple, WarnerMedia, Comcast and other companies have launched new streaming platforms. Data company Ampere said that there are now more than 100 streaming services to choose from, dizzying niche products, such as Shudder for horror films or Horse & Country for streaming horse racing.

Netflix shares have fallen by 10% since the beginning of the year. Unlike cable TV that usually locks customers in tricky paid packages, you can cancel your Netflix subscription with just a few taps of the keyboard, making it easier for people to tailor their needs Switch between services to watch. Netflix’s stock has fallen 10% this year, missing a broad stock market rebound. In recent years, due to the soaring stock price of the company, when the company reached the height of new subscribers, and investors were willing to pay a higher price for future growth, part of the reason was pause. But there are also signs that Netflix, established in 1997, is transitioning to a more mature stage. “Another stage of growth,” the company said in January that it no longer needs to raise debt to pay for its production costs, a milestone in a decade of relying on junk debt to surpass Hollywood studios. Netflix announced a $5 billion stock repurchase program last month. Netflix operates like an established company, raising prices and earning money from customers, while the century-old Walt Disney Company and its peers, like startups, prioritize development because they lose billions in streaming media every year. US dollars. Disney’s direct consumer business unit-including Disney Plus, Hulu and ESPN-reported a quarterly operating loss of $290 million and revenue of $4 billion. Disney expects its streaming business to lose money until fiscal year 2023. PP Foresight analyst Paolo Pescatore said: “Compared with other streaming media, Netflix is ​​at a different stage of growth.”

“It will take many years for many other streaming services to be profitable. Everyone is betting huge bets and will be the leaders in losing money over the years.” “We spent a lot of money” This strategy is good for Disney: Over the past year, Disney’s stock price has risen by more than 60%, because investors are focusing on how many streaming media users Disney has added rather than losing billions of dollars. Pandemic. The number of subscribers of the company in the first quarter was 5 million lower than expected, which made its stock price lower in after-hours trading on Thursday. According to Ampere, the number of video streaming subscriptions now exceeds the number of people in the United States, with 330 million users and a population of 330 million, which raises the question of how many services families will continue to pay for. Executives agree that clicks are ultimately the driving force of subscription business. As Hollywood knows, they are difficult to predict.

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