If for Visa, Mastercard is not the enemy – but rather is cash – in the streaming services universe, the analogy is quite similar. Or so Netflix says. “In our view, the likely outcome from the launch of these new [streaming] services will be to accelerate the shift from linear TV to on-demand consumption of entertainment,” stated the company in its official Q3 report.
For the Stranger Things creator, just like the networks such as TBS, USA, ESPN, MTV and Discovery didn’t take much audience share from each other in the first decades of cable TV, but instead, collectively took audience share from broadcast viewing in the US market – this is more likely to be the case regarding the streaming sector.
Amidst a competition growing at a fast pace, the top-tier company has been facing some serious challenges lately, with a drop in the US paid-subscribers base, which led to a decrease in the company’s shares, as well as more competitors stepping into the scene – read: Disney +, Warner Media’s HBO Max, Apple TV + and NBC Universal’s Peacock.
But in a story full of plot twists, like this of the streaming sector, the market leader may now reach a truce. Netflix has released the Q3 earnings report with some rosy news for its business. The streaming giant grew to $5.24 billion in revenue against $5.25 billion expected and increased 31% over the previous year. The best performance, however, was from the earnings per share – in which Netflix reported $1.47 against $1.04 expected by the market according to CNBC. After the announcement, the company’s stocks rose up to 8%.
As for the number of subscribers, the streaming service failed to meet the expectations – following the previous quarter results – when it suffered several losses in its domestic paid-subscribers base. “Since our US price increase earlier this year, retention has not yet fully returned on a sustained basis to pre-price-change levels, which has led to slower US membership growth,” declared the company regarding the matter. Meanwhile, international subscription grew to 6.26 million vs. 6.05 million expected by the market – a 23% increase year over year.
But Netflix’s biggest challenge is yet to come, as competition will launch its own services in the following months. And whether the streaming giant will be able to hold the crown, it’s a story that remains to be seen.