Elusive recovery for Netflix? The markets are attentive to the results of the streaming giant

After years of conquering users, in recent months Netflix has lost subscribers at a rapid rate, almost 200,000 worldwide in the first quarter alone compared to the end of 2021, news that dropped its share by 25% at that time.

Elusive recovery for Netflix? The markets are attentive to the results of the streaming giant
Elusive recovery for Netflix? The markets are attentive to the results of the streaming giant

The Californian group reacted by announcing the arrival of advertising to the streaming service, which in theory should have helped it finance the necessary investments to maintain its leading position in the industry.

However , this Tuesday, July 19, the streaming giant will present its results report for the second quarter of 2022, although apparently it would not be at all encouraging, according to the CNN network.

According to that medium, consulted analysts indicated that the outlook for the next period, that is, the second quarter, is complicated, taking into account that they would continue to present an accelerated loss of subscribers.

“There will be hell to pay if they report a figure significantly higher than the 2 million loss that is being managed ,” Andrew Hare, a senior vice president of research at Magid, told CNN Business.

Apparently, the analysts consulted by that news report consider that the above in Netflix would be part of a complex situation in that industry in general, already saturated and with little growth prospects .

So, after reports from several large banks, including Goldman Sachs (+2.54%) and Citigroup (+0.12%), which surprised analysts with better-than-expected quarterly results, markets are watching . to Netflix, Tesla and Twitter, but also to Johnson and Johnson, Lockheed Martin and United Airlines, among others.

Lifeline for Netflix?

Microsoft announced last Wednesday that it will manage the ad space sales technology at Netflix, the streaming giant that wants to offer less expensive subscriptions but including ads.

“Clearly that works for Hulu,” Netflix CEO Reed Hastings had said, referring to a competing service during a conference call with analysts.

“If you want the ad-free option, it will still be possible. If you prefer to pay less and tolerate advertising, there will be an option for you too, "added the manager.

This subscription will be added to the three already available (“Essential”, “Standard” and “Premium”), with the cheapest at ten dollars per month in the United States.

Microsoft will be in charge of designing and managing the platform for advertisers who want to deliver targeted advertising to Netflix users.

"Microsoft has the proven ability to respond to all of our advertising needs, building with us a new ad-supported subscription offering, " Netflix COO Greg Peters was quoted as saying in the statement.

data confidentiality

According to the US specialized press, Netflix had considered other partners such as Google, the world leader in advertising and owner of YouTube, as well as Comcast, an internet provider that owns Peacock, the NBCUniversal platform.

Unlike those companies, Microsoft does not have a video streaming service , although it does have services such as the LinkedIn social network and XBox video games.

"Microsoft gives us the ability to flexibly innovate in the future, both on the technology side and in sales techniques, and also provides strong privacy protections for our subscribers," said Greg Peters.

Introducing advertising means, in effect, exposing yourself to issues debated for years around the personal data of consumers , obtained on a large scale to target more lucrative personalized advertisements to users.

"We are at the beginning, but our long-term goal is clear : more options for consumers and a premium tool for brands, better than linear television," said the director.

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