Netflix (NFLX.US) shares reacted positively to news of the opening of the first Netflix Bites restaurant, in Los Angeles. Investors see food services as a new way to monetize the brand and its recognition. And potentially a whole new source of revenue. The restaurant's meals are expected to tie in with the streaming service's popular shows and attract fans although it is not yet clear on what scale the company wants to scale the food service business.
Fight against password sharing
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Create account Try a demo Download mobile app Download mobile app- As a result of the fight against password sharing in the US, Netflix reported a higher increase in subscriptions than it had at the start of the pandemic. According to Antenna, the platform in May had 4 record days in a row in terms of U.S. customer registrations since Netflix services have been measured in this regard (for 4 years)
- On May 26 and 27, 100,000 new accounts were added to the platform. In the following days, Netflix was expected to record an increase of more than 100% in customer inflows compared to the average of the previous two months;
- Last year's losses led the company to launch a broad campaign to end the password-splitting practice, which was limiting its revenue and reinvestment capacity. Estimates are that up to 100 million households worldwide may still have a shared Netflix account;
- The monthly fee for an additional non-household member is expected to be $7.99 or create a new account. Netflix is beginning to limit password sharing from the beginning of the year in Canada, Portugal and Spain as well. Q1 subscription growth (1.75 million) disappointed Wall Street, indicating an increase of min. 3 million
It's worth noting that the spike in subscriptions due to password sharing will be a 'one-off'. The result of Netflix's entire campaign-though likely to produce record subscription increases-may be difficult to repeat. In addition, it is unclear whether the simultaneous subscription cancellation trend reported by the company in its Q1 results is still ongoing and on what scale. Moreover, in a recessionary case, with central banks' monetary policies acting on economies of late, sentiment around streaming could come under pressure again. Nonetheless, Netflix has recently reaffirmed its dominance in the streaming platform market, and earnings expectations are rising.
Netflix (NFLX.US) shares are heading toward closing the January 2022 downtrend gap. The RSI indicates an overbought level. Source: xStation5
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