Netflix's Avengers Shield Is Still Working
The streaming leader is under threat as it matures but remains well ahead of competition like Disney. More important, profits are growing.
Netflix is still the first choice for streaming, and everyone else is competing for second place.
Photographer: Bing Guan/BloombergIt’s not what Netflix Inc. shareholders wanted to hear: The online video service lost 430,000 subscribers in the U.S. and Canada last quarter as life began to return to normal in that region. But as for the knee-jerk fear that these are signs of Netflix finally beginning to cave to competition? Not even close.
Shares of Netflix toggled between gains and losses after Tuesday’s earnings report, a reflection of the subscriber base shrinkage in North America and a tepid forecast for the third quarter. After adding an astonishing 37 million subscribers globally last year while the world lived under quarantine, investors are finally understanding what Netflix executives meant when they said that pace simply wouldn’t — couldn’t — last. It projects just 3.5 million new users globally this period, after signing up 1.5 million in the second quarter.