Recently, Netflix (Netflix), the "popular wholesaler" that produced "House of Cards", "Bojack Horseman", "Roma", "Stranger Things" and "Love, Death and Robots", released the second 2019 edition. quarterly financial report. With this release, the closing price on the day fell by 10.27%, and the market value evaporated by 16.2 billion US dollars overnight, which is equivalent to the market value of the entire iQiyi, and it is also the biggest drop in Netflix's stock price in the past three years! "Is Netflix doomed?" The financial report data shows that as of June 30, 2019, Netflix’s revenue in the second quarter was billion, an increase of 26.0% from billion in the same period last year; net profit was million, a decrease of 29.6% from million in the same period last year. %. Seeing here, it's not a bad earnings report.
And Netflix's "super bull stock" name is not covered. In the past ten years, the highest increase was 94.4 times, far exceeding Amazon's 23 times in the same period, pulling out a beautiful K line. Why does a small fluctuation in net profit make Netflix labelled "off the altar" by many overseas investment banks? Inappropriate interpretation | Netflix is heading for the end of growth, Disney: Really take yourself as the boss? The profit model of "strengthening the outside world and cadre in the middle" As we all know, Netflix is an advertising-free video website, which determines that its main revenue can only come from user subscriptions. Revenue = number of users x membership fee Netflix's business model is very simple: attract users through premium content → users pay to earn revenue → increase investment in original content → attract new users, stick to old users → gain more revenue... Simply put: Profit is achieved by driving "user growth" through "dead content".
Once user growth goes awry, the story doesn't make sense on Wall Street. However, the financial report tells us that there is a big problem with user growth: Netflix added a total of 2.7 million new subscribers in the second quarter, far less than the expected 5.3 million , and lost 126,000 U.S. subscribers , down from 60.229 million in the first quarter, the largest subscriber loss since 2011 . It is also the first negative growth of new users in Netflix's history ! Inappropriate interpretation | Netflix is heading for the end of growth, Disney: Really take yourself as the boss? The total number of Netflix subscribers fell sharply in 2019. Source: PC MAGAZINE Why is Netflix slow to add new, and even rated as "to the end of growth"? We think from both the domestic and international markets.