Since the beginning of the pandemic three years ago, Netflix has experienced its highest springtime subscriber surge. This is the most recent indication that a recent crackdown on password sharing and the introduction of a less expensive subscription option are having an impact.
Netflix surpassed experts’ forecasts of over 2.2 million new members between April and June, according to the most recent quarterly financial data, which were revealed on Wednesday.
By the end of June, there were 238.4 million subscribers globally.
The good news didn’t seem to satisfy investors, though, as the price of Netflix’s stock fell 8% during Wednesday’s extended session.
The management’s remarks in a shareholder letter highlighting the “competitive battle” going on against the backdrop of ongoing writer’s and actors’ union strikes in the U.S., which threaten to clog the pipelines supplying entertainment to streaming services, may have given rise to the worries.
The global production footprint of Netflix, which includes significant studio spaces in the UK, suggests that it is less likely to be impacted by the strikes than many of its American rivals.
Can Netflix sustain its current growth pace?
Louis Navellier, a well-known growth investor, claimed that Netflix now appears “locked and loaded” again after going through a difficult period during which it lost 1.2 million customers in the first half of 2017.
Netflix has recovered this year, but Investing.com analyst Jesse Cohen predicts another slowdown may be on the way. The future maintenance of this rate of subscriber growth for Netflix will be difficult, according to Cohen.
But Netflix anticipates a similar increase in subscribers between July and September as it did between April and June.
Since 2020, when the epidemic had largely restricted individuals to their homes and caused a rise in streaming usage, this past quarter has seen the company’s most notable spring season growth.