NETFLIX IN THE NEW ERA – STREAMING

For the second consecutive quarter, Netflix has failed to reach its subscriber growth target.

This situation is raising questions about the company’s coming ability to fend off the stiff streaming competition that’s just about to start sailing its way especially from Disney and Apple.  Although Netflix posted international subscriber growth, U.S. growth has faltered – said by the company to be the result of raising its rates this year, even though the higher subscription fees will allow the company to invest more to “strengthen its value proposition.”  What’s actually needed, according to the WSJ, is better quality of the new streaming movies that it’s producing and “fewer misfires.”  Even though the company has been involved in producing a large slate of original movies, the quality is “mixed,” but the production budgets on each has been 150 million or higher.  Netflix is set to debut 23 original movies during its fourth quarter to try to assist in boosting subscribers, but it’s said that the new season of Netflix’s popular original series won’t be as much of a factor as in the past.  Interestingly, as Netflix doesn’t have to report “box office results,” no one can really tell how the movies are doing, as the company reveals only select “viewer stats.”  Except, of course, when it reports its earnings results, which include the response of subscribers – new and cancelled – to the movies they’ve been viewing.  According to the Journal, Netflix is still burning cash – announcing a $2 billion bond offering on Monday – its second this year.  The current financial situation along with the upcoming ultra-competition from other streaming giants should make for an interesting time for Netflix over the next few months.

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