Whatâs Going On Here?Netflix is in a Good Place: the streaming giant announced better than-expected earnings late on Tuesday, and its shares initially jumped 10%. What Does This Mean?Netflix welcomed plenty of new subscribers when lockdowns kicked in early last year, but that growth slowed significantly in the third quarter. So investors might be relieved to see it was just a blip: the company gained almost 9 million new subscribers last quarter, blowing past analystsâ expectations of 6.5 million. And that figureâs arguably the most important one of all: it gives a good idea of how the companyâs future income will look (tweet this).
Still, Netflix could boast a few other good numbers too: it revealed itâs expecting to earn enough cash this year to fund its own operations, rather than rely on investors or banks. The company even said itâs likely to buy back its own stock â a move that would push up its share price and make its investors very pleased indeed. Why Should I Care?For markets: Winner takes all. Netflix promised to add another 6 million new subscribers this quarter, but the bigger question is whether itâll outdo its streaming rivals â especially with Disney+ ramping up much quicker than expected. Its 74 million subscribers is a long way off Netflixâs 204 million, sure, but the Mouse Houseâs platform did only launch 14 months ago. That fact isnât lost on investors: Disneyâs shares have climbed 40% in the last three months, while Netflixâs have barely moved.
Zooming in: Someone make it stop. Then again, this town is big enough for the both of them. That might be why they ended up taking the top spots in last yearâs most-streamed content, with Netflix dominating the top 10 television series of 2020 and Disney leading the way in movies. Bored kids and exasperated parents mightâve had something to do with the latter: Disney+ subscribers played Frozen II for 15 billion minutes between them. |