Disclaimer: Please do your own research before acting on anything said in this article. This is not financial advice and I will not be held accountable for any losses you may have. This article is also not promising that you will gain a profit from investments suggested.
Netflix is on thin ice right now as the future of the company is on the line this Tuesday with their second-quarter earnings report. Many investors are braced for an outcome that's worse than the feeling of having your favourite show cancelled after the first season.
Massive Losses
Streaming service "Netflix" has suffered significant subscriber losses so far this year and predictions are hinting that it could lose another 2 million subscribers in the second quarter.
On top of mass subscriber losses, the services stock value has fallen around 70% so far and people are predicting that it will likely continue to decrease throughout the year.
Plans to Correct the Losses
Netflix does have some ideas up their sleeves to compensate for the loss of subscribers. One of which is ads, yes it seems that Netflix will be adding ads to their streaming service. This will likely follow a tier system allowing users to pay more to have ads removed to compensate for the loss of subscribers. Netflix is also really cracking down on password/account sharing among people (they will restrict account sharing), to push people to subscribe to Netflix so that they can continue to watch their shows/movies.
If Netflix Reports Worse Numbers
"There will be hell to pay if they report a number that is significantly higher than the 2 million loss being thrown around," Andrew Hare, a senior vice president of research at Magid, said to CNN. If Netflix reports more than a 2 million subscriber loss that was predicted for the second quarter, we can probably expect some shareholders to sell and in turn see the share price drop. On top of this, the decline in subscribers would probably continue throughout quarter three and likely into quarter four. While Netflix still has over 200 million subscribers, seeing a 2 million loss is still enough to make investors weary. The earnings report on Tuesday will be a deciding factor in reshaping the company and its future.
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