Last week saw Netflix posting a stronger than expected third-quarterly financial results. The streaming giant made $7.5 billion in revenues and ended the period with $1.4 billion in profit. These impressive results came as a result of Netflix gaining 4.4 million new subscribers over the three-month period. Considering that Netflix had only anticipated getting 3.5 million new customers, it is an impressive result for the tech brand.
But what’s interesting is the fact that Netflix shares actually dipped slightly after the Q3 financial report was released. The share price dropped 1% despite the streaming platform showing that it can still attract new subscribers. However, the prevailing perception is that the amount of incoming customers should have been even more impressive considering that Netflix had launched a large amount of content that was delayed as a result of the Covid-19 pandemic.
With no money coming in for the amount of hours of content viewed nor any kind of advertising revenue, getting new subscriptions is Netflix’s main objective. As such, world-of-mouth streaming sensations like Squid Game are pivotal in helping the brand’s profitability. Plus even the controversy generated by David Chappelle’s latest Netflix venture will be enough to make sure that the streaming platform doesn’t get ignored.
The streaming market is growing ever more competitive with major rivals like Disney+, Apple and HBO Max all significantly upping their games in recent months. All of which means that Netflix faces another series of challenges and opportunities in the run up to the festive season.
What can Netflix expect from the rest of 2021 and beyond?
Netflix will be hoping that recent successes such as Squid Game continue to attract new customers to the streaming platform for the remainder of 2021. It’s traditionally a busy time of year for Netflix and the brand has already posted an optimistic forecast that it hopes to pick up 8.5 million new subscribers.
Such an impressive achievement would see Netflix well on course to make $7.7 billion in sales of which $365 million would be marked down as profit. This would largely be down to a vast amount of new content that’s due for release in the coming months.
Beyond this, Netflix executives have noted that the release schedule in 2022 should approach some kind of normality following a fairly erratic couple of years. However, Netflix isn’t resting easy on its film and television catalogue as plans are afoot to move into gaming.
The brand has already started testing its gaming product in certain countries and it’s expected to follow the familiar subscription package. Netflix has so far recruited Night School Studio in its bid to launch its gaming output, although details are still scarce about what we can expect in terms of titles and subscriptions fees. However, it has been detailed that Netflix would be unlikely to include any advertising or in-game purchases to its model. All of which means that the pressure will continue for Netflix to attract and retain new customers.