On Thursday, leading streaming site Netflix announces a decline in profit despite the growing number of user subscribers.
The marketing record shows Netflix’s profit drop compared to last quarter’s numbers. Netflix’s profit of $720 million on revenue of $6.1 goes down by the first three months of the year $709 million profit with $5.8 billion revenue.
Netflix paid user subscribers grew by 10.1 million since lockdown began.
In a letter to the shareholders, executives stated Netflix’s focus as of now.
As the whole world slowly re-opens, our main business priority is to restart our productions safely and in a manner consistent with local health and safety standards to ensure that our members can enjoy a diverse range of high-quality new content.
Netflix added that there is no one-size-fits-all approach. The entertainment company is adapting to local circumstances while slowly resuming productions in its various outlets around the world.
Why did Netflix Profit Drop Despite Increasing Paid Membership?
Records show during the first few months of lockdown a sharp increase in user subscribers was observed.
Ranks of paid membership grew by 10.1million to about 193 million in total.
This means that subscribers rushed to join during the early months of the lockdown being confined inside their homes.
In the executives’ letter, Netflix mentions increasing competitors is one of the reasons why Netflix’s profit drops. It was also stated in the letter that Tiktok growth is astounding, showing the fluidity of internet entertainment.
Not just TIktok, because Netflix is also facing increasing entertainment services competitors such as Disney, NBCUniversal, and WarnerMedia.
Executives stated that Netflix will continue to stick to their strategy instead of worrying about competitors.
We want to have so many hits that you just come to Netflix and go hit-to-hit and never have to think of those other services
Reed Hastings, Chief Executive Officer said.
Profit drop motivates Netflix company to create improved content and amenities to its user. Netflix will focus on trying to improve services and content every quarter for users’ satisfaction.
Netflix Executive Changes
As a part of a long-term succession plan, Netflix announced some executive changes.
The board appoints Ted Sarandos as a co-chief executive. Greg Peters will handle two positions as a chief operating officer and chief product officer.
Jeffry Jeve , News Fior Author, is a dedicated Freelance Writer and a Blogger who stays organized as much as possible. He became a writer in Modern Writers PH and a Managing-Editor-in-Chief in a school publication named “The Lightseekers”.