What’s going on?

Netflix announced worse-than-expected quarterly results late on Tuesday, so the streaming giant might be turning to a few new developments – like gaming – to take its business to the next level.

What does this mean?

Netflix warned investors at its last earnings update that it’d add just 1 million new subscribers this quarter, so here’s the good news: the company posted 1.5 million, and its revenue came in ahead of expectations. But its profit fell short of estimates, and its forecast for this quarter wasn’t looking promising either: Netflix admitted it’ll add just 3.5 million subscribers versus analysts’ predicted 5.9 million. And since that number is a proxy for future income, it’d better start churning out some unmissable content – and fast (tweet this).

Why should I care?

For markets: What does Netflix want, a medal?

Netflix’s stock initially fell 2%, and there are a couple of potential reasons why. For one thing, 3.5 million new subscribers isn’t all that many considering the 213 million Netflix already has. And for another, investors had actually been anticipating that the company would do better than it previously promised, and – prematurely, it seems – sent its stock up 6% in the last month.

The bigger picture: Investors are waiting for Netflix’s next premiere. 

Thing is, Netflix isn’t just competing with rival streamers like Amazon Prime Video, but anything that draws potential viewers away. That might be why the streaming giant has been making some big hires in the podcasting space, and why the company is reportedly looking to launch a video game service in the next year. And since it can just bundle all these services together, that should help it answer investors’ age-old question around how many subscription services customers need: Netflix is plenty.

For information purposes only, not intended to constitute financial advice from us. The customer should assess the risk of  potential loss carefully and individually before investing in any financial products. Dabbl Group Limited is authorised by the FCA under the reference numbers 767263 as an appointed representative of its Principal firm VIBHS Financial Ltd, which is authorised and regulated by the Financial Conduct Authority under the reference number 613381.

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