In the second quarter, Netflix net profit almost doubled from last year. While the results were below expectations, the market is concerned that the streaming giant is gradually losing its lead over its many competitors.
Netflix has benefited greatly from the health crisis-related confinements in 2020. However, Amazon Prime Video and its recent competitors Disney+, Apple TV+, HBO Max and even Peacock (illustration image) have become fierce competitors.
During the quarter, the platform had more than 209 million paying subscribers, and earned 7.3 billion dollars in revenue (+19%) for a net profit of 1.35 billion. After the close of trading, its stock lost 1.5% in electronic trading on Wall Street.
Despite the craze for video on demand during the pandemic, the group was pleased to be “ahead of its forecasts” in terms of subscriber growth.
“Netflix appears to have reached market saturation in the United States,” says eMarketer analyst Eric Haggstrom.
Although the company has been able to increase prices and increase revenues despite competition from cheaper services, he affirms that Disney has gained significant market share from Netflix.
The company has also begun diversifying, with the launch of an online store and the hiring of a video game manager this month.
“New revenue streams like merchandising and future experiments like theatrical releases, podcasts, and video games may boost growth, but success is far from certain,” Eric Haggstrom cautioned.