Article content
Elon Musk thinks Netflix is losing subscribers because its programming has been infected by the “woke mind virus” that is making it “unwatchable.”
Company blames subscriber loss on increased competition and password sharing
Elon Musk thinks Netflix is losing subscribers because its programming has been infected by the “woke mind virus” that is making it “unwatchable.”
The Tesla and SpaceX CEO took to Twitter after shares of the streaming leader plunged as much as 39% following Netflix’s announcement it had lost 200,000 subscribers between January and March of this year — the first time it has lost customers since 2011.
“The woke mind virus is making Netflix unwatchable,” the billionaire tweeted.
Musk did not specify which content on Netflix was “woke,” but he agreed with one follower who wrote, “It’s not just Netflix. Movies in general, video games, TV, it’s all infested with current year trend woke garbage for fear of offending a green haired freak next to the ban button. Nothing original anymore at all, except for media coming out of places like Japan or Korea, ironically.”
When another follower replied that the “woke mind virus is the biggest threat to civilization,” Musk, who is working on a bid to buy Twitter, replied, “Yes.”
While Netflix sided with comedian Dave Chappelle, refusing to censor his most recent special which included jokes aimed at transgender people, the company has been criticized for inaccurately depicting women warriors in Vikings: Valhalla and accused of fuelling a racist portrayal of white people in Dear White People.
The company also released He’s Expecting, a Japanese comedy about a man who gets pregnant.
But Netflix’s co-founder Reed Hastings blamed the subscriber loss on increased competition and password sharing.
According to CNBC, Netflix estimates more than 30 million U.S. and Canadian households are using a shared password to access its content. The company added that more than 100 million additional households were likely using a shared password worldwide.
To address the drop, Netflix hinted it will seek to get millions of freeloaders to pay up.
“(Account sharing)’s not a new thing,” said Reed Hastings. “We’re working on how to monetize sharing. Remember, these are 100 million households that already are choosing to view Netflix. They love the service. We just got to get paid.”
But while Musk took time out to chastise Netflix, he has a partnership with the streamer. Last year’s documentary series Countdown: Inspiration4 Mission to Space followed Musk’s SpaceX Inspiration4 mission, while this month’s Return to Space centres on his SpaceX company.
[unable to retrieve full-text content]
Netflix (NFLX) stock slid as much as 9.6% Friday after the company gave a second quarter revenue forecast that missed estimates and announced it would stop reporting quarterly subscriber metrics closely watched by Wall Street.
On Thursday, Netflix guided to second quarter revenue of $9.49 billion, a miss compared to consensus estimates of $9.51 billion.
The company said it will stop reporting quarterly membership numbers starting next year, along with average revenue per member, or ARM.
“As we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact,” the company said.
Netflix reported first quarter earnings that beat across the board on Thursday, with another 9 million-plus subscribers added in the quarter.
ADVERTISEMENT
Subscriber additions of 9.3 million beat expectations of 4.8 million and followed the 13 million net additions the streamer added in the fourth quarter. The company added 1.7 million paying users in Q1 2023.
Revenue beat Bloomberg consensus estimates of $9.27 billion to hit $9.37 billion in the quarter, an increase of 14.8% compared to the same period last year as the streamer leaned on revenue initiatives like its crackdown on password-sharing and ad-supported tier, in addition to the recent price hikes on certain subscription plans.
Netflix’s stock has been on a tear in recent months, with shares currently trading near the high end of its 52-week range. Wall Street analysts had warned that high expectations heading into the print could serve as an inherent risk to the stock price.
Earnings per share (EPS) beat estimates in the quarter, with the company reporting EPS of $5.28, well above consensus expectations of $4.52 and nearly double the $2.88 EPS figure it reported in the year-ago period. Netflix guided to second quarter EPS of $4.68, ahead of consensus calls for $4.54.
Profitability metrics also came in strong, with operating margins sitting at 28.1% for the first quarter compared to 21% in the same period last year.
The company previously guided to full-year 2024 operating margins of 24% after the metric grew to 21% from 18% in 2023. Netflix expects margins to tick down slightly in Q2 to 26.6%.
Free cash flow came in at $2.14 billion in the quarter, above consensus calls of $1.9 billion.
Meanwhile, ARM ticked up 1% year over year — matching the fourth quarter results. Wall Street analysts expect ARM to pick up later this year as both the ad-tier impact and price hike effects take hold.
On the ads front, ad-tier memberships increased 65% quarter over quarter after rising nearly 70% sequentially in Q3 2023 and Q4 2023. The ads plan now accounts for over 40% of all Netflix sign-ups in the markets it’s offered in.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
Read the latest financial and business news from Yahoo Finance
Oil prices gave up nearly all of early Friday’s gains after an Iranian official told Reuters that there hadn’t been a missile attack against Iran.
Oil surged by as much as $3 per barrel in Asian trade early on Friday after a U.S. official told ABC News today that Israel launched missile strikes against Iran in the early morning hours today. After briefly spiking to above $90 per barrel early on Friday in Asian trade, Brent fell back to $87.10 per barrel in the morning in Europe.
The news was later confirmed by Iranian media, which said the country’s air defense system took down three drones over the city of Isfahan, according to Al Jazeera. Flights to three cities including Tehran and Isfahan were suspended, Iranian media also reported.
Israel’s retaliation for Iran’s missile strikes last week was seen by most as a guarantee of escalation of the Middle East conflict since Iran had warned Tel Aviv that if it retaliates, so will Tehran in its turn and that retaliation would be on a greater scale than the missile strikes from last week. These developments were naturally seen as strongly bullish for oil prices.
However, hours after unconfirmed reports of an Israeli attack first emerged, Reuters quoted an Iranian official as saying that there was no missile strike carried out against Iran. The explosions that were heard in the large Iranian city of Isfahan were the result of the activation of the air defense systems of Iran, the official told Reuters.
Overall, Iran appears to downplay the event, with most official comments and news reports not mentioning Israel, Reuters notes.
The International Atomic Energy Agency (IAEA) said that “there is no damage to Iran’s nuclear sites,” confirming Iranian reports on the matter.
The Isfahan province is home to Iran’s nuclear site for uranium enrichment.
“Brent briefly soared back above $90 before reversing lower after Iranian media downplayed a retaliatory strike by Israel,” Saxo Bank said in a Friday note.
The $5 a barrel trading range in oil prices over the past week has been driven by traders attempting to “quantify the level of risk premium needed to reflect heightened tensions but with no impact on supply,” the bank said, adding “Expect prices to bid ahead of the weekend.”
At the time of writing Brent was trading at $87.34 and WTI at $83.14.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
<!–
–>
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
DJT Stock Rises. Trump Media CEO Alleges Potential Market Manipulation. – Barron's
Trump Media alerts Nasdaq to potential market manipulation from 'naked' short selling of DJT stock – CNBC
Private equity gears up for potential National Football League investments – Financial Times
Botched home sale costs Winnipeg man his right to sell real estate in Manitoba – CBC.ca
Canada Child Benefit payment on Friday | CTV News – CTV News Toronto
2024 Stanley Cup Playoffs 1st-round schedule – NHL.com
Gas prices see 'largest single-day jump since early 2022': En-Pro International – Yahoo Canada Finance
Enter the uncanny valley: New exhibition mixes AI and art photography – Euronews