Business
Netflix falls as benefits from password sharing crackdown to take time
|
|
By Samrhitha A
(Reuters) -Shares of Netflix tumbled more than 8% on Thursday after the video-streaming pioneer’s lackluster revenue rise sparked concerns of a longer road to growth from its new initiatives.
The company added nearly 6 million subscribers in the second quarter – almost three times above Wall Street’s expectations – thanks to a crackdown on password sharing and the introduction of a cheaper subscription tier that is bundled with advertising.
However, quarterly revenue growth and forecast lagged estimates, prompting co-Chief Executive Officer Greg Peters to caution that it would take “several quarters” to see returns from those efforts.
Netflix shares recorded their second-worst day this year, losing nearly $18 billion in value, on Thursday. So far in 2023, the stock has gained about 48%.
“Netflix needs to squeeze as much juice as it can from different avenues,” Hargreaves Lansdown analyst Sophie Lund-Yates said, adding the market was “realms away from knowing” if the much-touted ad tier could become the new cash cow.
The company has been fighting off rivals Disney+ and Amazon’s Prime Video in an industry that is showing signs of saturation in the United States. Many of the company’s new sign-ups are in countries where it charges lower prices.
“Some folks are using the result as an excuse to take some profits,” Pivotal Research Group analyst Jeffrey Wlodarczak said.
Analysts remained broadly upbeat on the stock though, with at least 26 of them lifting their price targets on hopes that revenue growth would accelerate in the second half of 2023 thanks to the new money-making initiatives.
They also said the ongoing strike in Hollywood might not hit Netflix’s content slate until 2024 and that it could give the company an edge over its peers as it has a solid lineup of shows.
The company also has a big international presence, giving it access to a wide range of non-U.S. shows and shielding it from the strike. Its non-English titles such as “Physical 100”, “The Glory” and “Alice in Borderland” have also been gaining in popularity.
“Every other streamer is now increasing prices, while Netflix is now extremely competitive with its ad tier. It is putting all the building blocks in place for future revenue growth,” PP Foresight analyst Paolo Pescatore said.
He added the company would also benefit from its move to remove the cheapest plan without ads tier in core markets, which should help support declining average revenue per user.
Netflix on Wednesday raised its 2023 free-cash-flow forecast to at least $5 billion from an earlier estimate of about $3.5 billion as a result of the strike.
(Reporting by Samrhitha Arunasalam in Bengaluru; Additional reporting by Yuvraj Malik; Editing by Nivedita Bhattacharjee, Anil D’Silva and Shounak Dasgupta)
Business
Clean electricity regulations can be tweaked, but Alberta won't get special deal: Guilbeault – National Post
We use cookies and data to
- Deliver and maintain Google services
- Track outages and protect against spam, fraud, and abuse
- Measure audience engagement and site statistics to understand how our services are used and enhance the quality of those services
If you choose to “Accept all,” we will also use cookies and data to
- Develop and improve new services
- Deliver and measure the effectiveness of ads
- Show personalized content, depending on your settings
- Show personalized ads, depending on your settings
If you choose to “Reject all,” we will not use cookies for these additional purposes.
Non-personalized content is influenced by things like the content you’re currently viewing, activity in your active Search session, and your location. Non-personalized ads are influenced by the content you’re currently viewing and your general location. Personalized content and ads can also include more relevant results, recommendations, and tailored ads based on past activity from this browser, like previous Google searches. We also use cookies and data to tailor the experience to be age-appropriate, if relevant.
Select “More options” to see additional information, including details about managing your privacy settings. You can also visit g.co/privacytools at any time.
We use cookies and data to
- Deliver and maintain Google services
- Track outages and protect against spam, fraud, and abuse
- Measure audience engagement and site statistics to understand how our services are used and enhance the quality of those services
If you choose to “Accept all,” we will also use cookies and data to
- Develop and improve new services
- Deliver and measure the effectiveness of ads
- Show personalized content, depending on your settings
- Show personalized ads, depending on your settings
If you choose to “Reject all,” we will not use cookies for these additional purposes.
Non-personalized content is influenced by things like the content you’re currently viewing, activity in your active Search session, and your location. Non-personalized ads are influenced by the content you’re currently viewing and your general location. Personalized content and ads can also include more relevant results, recommendations, and tailored ads based on past activity from this browser, like previous Google searches. We also use cookies and data to tailor the experience to be age-appropriate, if relevant.
Select “More options” to see additional information, including details about managing your privacy settings. You can also visit g.co/privacytools at any time.
|
|
The United Auto Workers union is expanding its strike against U.S. automakers to two new plants, as 7,000 workers at a Ford plant in Chicago and a General Motors assembly factory near Lansing, Mich., will walk off the job at midday on Friday.
Union president Shawn Fain told workers on a video appearance Friday that negotiations haven’t broken down but Ford and GM have refused to make meaningful progress.
“Despite our willingness to bargain, Ford and GM have refused to make meaningful progress,” Fain said. “That’s why at noon eastern we will expand our strike to these two companies.”
“Not a single wheel will turn without us,” Fain said, adding that the 7,000 soon-to-be picketers are the “next wave of reinforcements.”
Stellantis, the third major automaker targeted by the union, and the maker of brands like Chrysler, Jeep and Dodge, was spared further action, as Fain said the company’s management has made significant concessions on things like a cost-of-living allowance and a freeze on outsourcing.
The Ford plant in Chicago makes the Explorer and Police Interceptor, as well as the Lincoln Aviator SUV.
The GM plant in Michigan’s Delta Township near Lansing manufactures large crossover SUVs such as the Chevrolet Traverse.
The two new plants join 41 other factories and distribution centres already seeing job action.
So far, the impact on Canada’s auto industry has been muted, as none of the idled factories are major users of Canadian-made components.
U.S. President Joe Biden visited the United Auto Workers picket line in Detroit on Tuesday, saying the workers deserve a significant raise after sacrifices made during the 2008 financial crisis. Auto companies are doing ‘incredibly well,’ Biden said, ‘and you should be doing incredibly well, too.’
Edward Moya, a strategist with foreign exchange firm Oanda, says that despite the expanded job action, the strike seems to be nearing an “endgame” as the two sides are clearly making slow but steady progress.
“Yesterday, the UAW said they are targeting a 30 per cent pay raise, which is down from the 46 per cent they were asking for in early September,” he said. “Automakers have raised their offer to 20 per cent but were not offering much on retirement benefits. The longer this drags, the more both sides lose, so a deal should be reached in the next week or two.”
Charting the Global Economy: Inflation Cools in US and Europe – BNN Bloomberg
Art Gallery of Hamilton seeks city's support for expansion – Hamilton Spectator
Clean electricity regulations can be tweaked, but Alberta won't get special deal: Guilbeault – National Post
-
Real eState8 hours ago
China Evergrande Suspends Trading as New Trouble Roils Property Market – The New York Times
-
Real eState21 hours ago
A judge found Trump committed fraud in building his real-estate empire. Here's what happens next – The Associated Press
-
Business23 hours ago
What every Canadian investor needs to know today – The Globe and Mail
-
Real eState22 hours ago
Commercial real estate lending under OSFI scrutiny – Financial Post
-
Economy16 hours ago
Powell Says Public's Understanding Key to Fed Impact on Economy – Bloomberg
-
Economy20 hours ago
Canadian dollar extends quarterly decline as economy stalls – The Globe and Mail
-
Business22 hours ago
Varcoe: AESO warns of blackouts with feds' plan for a net-zero power grid by 2035 – Calgary Herald
-
Economy15 hours ago
Canadian economy to get ‘back on its feet’ next year, Deloitte Canada says