Netflix finally becomes what it once hated.
$Netflix(NFLX)$ the result exploded again. Its stock price plumped 25% after the last earnings, and I didn't expect that appear again. The paid memberships saw the first decline since 2011 with a net loss of 0.2 million. And the worst part is that management said a continued decline of 2 million in the second quarter, which is 10 times in the first quarter!
The following articles describe about Netflix's earnings, please read below:
Netflix Shares Fell 25%, Losing Subscribers Amid Growing Competition, Account Sharing
[PDF]Netflix Shareholder Letter
Revenue is still growing, but its growth has been slowing down. The declining growth rate can't be considered a growth company anymore. Microsoft also grew by 9% last quarter.
Netflix has been raising memberships prices to increase its revenue before. But it seems that it can't rise in competitive pressure, and the loss of price increases will be even higher.
At this performance meeting, the management said that they began to take the opportunity to make advertising revenue.Record of Q&A session of performance meeting The exact words are as follows:
Related to that, Greg has done great work on the price spread. And one way to increase the price spread is advertising on low-end plans and to have lower prices with advertising. And then who had followed Netflix know that I've been against the complexity of advertising and a big fan of the simplicity of subscription.
But as much I'm a fan of that, I'm a bigger fan of consumer choice. And allowing consumers who would like to have a lower price and are advertising-tolerant get what they want to make a lot of sense. So that's something we're looking at now. We're trying to figure out over the next year or 2. But think of us as quite open to offering even lower prices with advertising As a consumer choice.
It means they will inserting ads into low-cost membership plans, and those users will pay lower but accept advertisements.
This is a helpless choice. Even the advertisement is watched on Netflix, what is the difference between Netflix and other video players? Netflix, who said that it wanted to make high-quality contents and impress users to pay by contents, was gone?
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Omg 😱