Netflix lost customers in the first half of 2022, prompting a steep drop in the shares and leading to a sell-off in other media stocks. The plan has been controversial with users, and analysts were divided about how it would impact growth. Viewers using someone else’s subscription can now either pay to keep sharing or set up their own account. In May, the streaming leader started charging people in more than 100 countries to continue sharing their passwords, a key part of its plan to accelerate growth after a sluggish 2022. The company credited much of the boom to its crackdown on password sharing. Management expects similar growth this period. The results marked the company’s best second quarter since the depths of the pandemic three years ago and far surpassed Wall Street forecasts of 2.07 million new subscribers. Netflix added 5.89 million customers in the second period, more than doubling Wall Street estimates, and finished the quarter with 238.4 million members. The shortfall overshadowed a solid quarter by most other metrics. “While we’ve made steady progress this year, we have more work to do to re-accelerate our growth,” the company wrote in a letter to shareholders. It will take several quarters to realise the financial benefits of paid sharing, co-CEO Greg Peters said Wednesday. Netflix executives called for patience on a call with Bank of America analyst Jessica Reif Ehrlich. The results were fine “but not enough to move the stock higher given the move in past three months,” LightShed Partners analyst Rich Greenfield said after the results were announced. The company expects sales of $US8.52 billion in the third quarter, compared with the $US8.67 billion average of Wall Street estimates. Netflix also generated less revenue per customer in the most recent quarter. That was due in part to foreign exchange rates and to price cuts in some markets. While Netflix grew its subscriber base by 8 per cent, sales rose just 2.7 per cent to $US8.19 billion, coming in slightly below analysts’ projections. Is the Netflix share price in that dumpster? Arnold Schwarzenegger walks away from a hot mess in the streaming series Fubar. The stock had risen 62 per cent this year through Wednesday on optimism surrounding the company’s new initiatives. The shares fell as much as 8.7 per cent in New York Thursday morning, the most since December 15. Netflix shares are poised for their biggest drop this year after projecting third-quarter revenue that fell short of Wall Street estimates, suggesting a crackdown on password sharing and a new advertising tier aren’t yet delivering the sales growth analysts anticipated.
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