Netflix is not interested in acquiring any of the major streaming services, as it has seen a rise in subscribers and revenue. The company’s chief content officer says that they are happy with their current roster of shows and plans to continue investing in them.
Netflix announced that it has added 1.5 million subscribers in the first quarter of 2018, but there are no plans to acquire any other companies as it continues to grow. Read more in detail here: netflix stock.
While its competition is increasing and competitors are merging to build more formidable entertainment platforms, the streaming giant told investors on Tuesday that it does not believe it has to grow in order to compete.
In its second-quarter letter to shareholders, Netflix said, “We don’t regard any assets as’must-haves,’ and we haven’t yet identified any large-scale ones to be sufficiently compelling to act upon.”
The firm claims that the potential of streaming is driving deal-making, but that media consolidation in recent years has had little impact on its development.
“We mostly compete with ourselves to enhance our service as quickly as possible. We’re sure that if we do that, we’ll be able to retain our solid position and continue to develop as we have over the last two decades.” Netflix has said.
Netflix made the announcement as the business said that it gained 1.5 million new members in the second quarter, after a spike in new subscriptions last year during the height of the Covid-19 epidemic.
The epidemic, Netflix claimed, has caused “lumpiness” in its membership growth, alluding to greater growth last year and slower growth this year. According to the business, there are 209.2 million members worldwide. In after-hours trade, the stock remained unchanged.
The approach to acquisitions taken by the worldwide leader in streaming is diametrically opposed to that of the rest of the entertainment business, which is in a frenzy of deal-making in the hopes of building content behemoths that can compete with Netflix.
AT&T Inc. and Discovery Inc. agreed in May to merge their media businesses into a new stand-alone company with HBO Max, CNN, Discovery+, and the Warner Bros. movie and television studios as assets. Amazon.com Inc. agreed to buy MGM for $6.5 billion last month in the aim of bolstering its Prime Video streaming service by leveraging the studio’s catalog and intellectual property.
It’s possible that the negotiations aren’t over yet. According to individuals familiar with the situation, Comcast Corp., the parent company of NBCUniversal, and ViacomCBS Inc. have explored forming a streaming collaboration for foreign markets.
While Netflix is avoiding mergers and acquisitions, it is trying to diversify its company into other areas, especially gaming. Mike Verdu, a Facebook executive, was recruited as vice president of game development last week. The firm said that it will concentrate on mobile games and would most likely use Netflix programs and movies as material. Netflix subscribers will get access to games at no additional cost.
In its shareholder letter, the firm said, “We believe the timing is ripe to learn more about how our members value games.”
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Netflix Chairman and Co-Chief Executive Reed Hastings stated on the company’s investor video on Tuesday that gaming and other auxiliary businesses, such as retail, aren’t intended to be new profit centers or take away from the company’s content operations.
Mr. Hastings said, “We’re a one-product business with a lot of supporting components.”
For the three months ending June 30, Netflix added 1.5 million new customers, above its previous estimate of one million new users. It increased by ten million in the second quarter of last year, when most of the globe was under lockdown.
The Los Gatos, Calif.-based company’s total sales increased to $7.34 billion from $6.15 billion the previous year. According to FactSet, Wall Street anticipated $7.32 billion.
Netflix’s profit grew to $1.35 billion, or $2.97 per share. Earnings were $720 million, or $1.59 per share, a year ago. Earnings fell short of analysts’ expectations of $3.18 per share in GAAP earnings.
In terms of new customers, the Asia Pacific area was the company’s most successful, accounting for almost 70% of the 1.5 million new subscribers. The streaming giant lost 400,000 members in the United States and Canada, the first time it has done so in both countries since the second quarter of 2019.
In comparison to the same quarter a year ago, Netflix subscriber engagement was also down for the quarter. However, as compared to the second quarter of 2019, this statistic was up 17%.
Netflix expects a better third quarter as delays in media creation shorten and more new content becomes accessible. The firm expects 3.5 million paid net additions in the third quarter of 2020, up from 2.2 million in the third quarter of 2020.
For the quarter, the pandemic hampered Netflix’s original programming portfolio, but the company said it anticipates a solid slate for the remainder of the year.
—This article was co-written by Allison Prang.
Joe Flint can be reached at [email protected]
Amplifications and corrections AT&T Inc. and Discovery Inc. announced in May that they will merge their media businesses into a new stand-alone entity. Discovery Inc. was mistakenly named as Discovery Communications Inc. in an earlier version of this article. (This was updated on July 20, 2021.)
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Netflix is a publicly traded company, which means that it’s stock price changes based on the number of subscribers it has. The company announced in its quarterly report that they have added 1.5 million subscribers. Reference: is netflix a publicly traded company.
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