Netflix’s second-quarter revenue grew 13% and its net income jumped close to 10 percent, the company said Thursday, in line with Wall Street’s expectations.
Audiences watched 97 billion hours of content in the first half of the year, about 2 percent more than they did in the same period the year before. Netflix highlighted the mystery crime series “I Will Find You” as its best new series in the quarter and hailed a strong showing by the animated film “Swapped.”
Netflix’s stock has fluctuated widely in the past year. In December, the streaming giant made a surprise $83 billion bid to acquire Warner Bros. Discovery’s film and television studios, but the proposed acquisition was never a big hit with investors. Netflix’s stock was trading down about 40 percent until the company abandoned the deal in February. The stock has rebounded since then, but is still down some 20 percent this year.
The company reduced its expectations for third-quarter revenue to 11.7 percent, its lowest percentage increase in at least five quarters. As a result, shares dropped close to 9 percent in after-hours trading.
In recent weeks, there has been increased attention on the viewership numbers for the second seasons of popular Netflix shows. Some, like the series “One Piece” and the anthology dramedy “Beef,” lost between 30 and 60 percent of their audience, according to the company’s engagement metrics.
“Our shows tend to start really big, while most other places, their shows start pretty small and occasionally grow from there,” Netflix’s co-chief executive Ted Sarandos said during a call with investors on Thursday. “Our Season 2 falloff is actually slightly improved this year relative to last year.”
He said the company had no plans to change how it released its shows.
The company also said it would release its half-yearly engagement report annually instead, starting in January. Last year, Netflix stopped reporting quarterly subscriber numbers.
The latest change did not sit well with analysts.
“Netflix is running a familiar play when a metric gets uncomfortable: It shifts the spotlight,” Mike Proulx, a Forrester Research analyst, wrote in an email. “When subscriber growth became a less reliable story, Netflix stopped reporting quarterly membership numbers. Now, as engagement faces more scrutiny, the company is reducing the frequency of that report”
For the first time on Thursday, Netflix explained that some of its shows were designed to keep customers while others were designed to acquire them. Live events like Major League Baseball’s Home Run Derby, which Netflix broadcast this week, don’t drive many views but do encourage new users to sign up.
The company also detailed how it was using artificial intelligence to improve the user experience with greater personalization and voice search functionality. In addition, the company used A.I. in the production process for more than 300 titles, it said. Most of its uses were in postproduction, with the tools helping to enhance crowds and add world-building establishing shots. “The American Experiment,” a five-part documentary series on the origins of democracy in the United States, featured 17 minutes of A.I.-enhanced footage.
Mr. Sarandos said on the call with investors that without A.I., “productions would have left out those key shots because they just wouldn’t have been able to afford them.”
-The New York Times
Audiences watched 97 billion hours of content in the first half of the year, about 2 percent more than they did in the same period the year before. Netflix highlighted the mystery crime series “I Will Find You” as its best new series in the quarter and hailed a strong showing by the animated film “Swapped.”
Netflix’s stock has fluctuated widely in the past year. In December, the streaming giant made a surprise $83 billion bid to acquire Warner Bros. Discovery’s film and television studios, but the proposed acquisition was never a big hit with investors. Netflix’s stock was trading down about 40 percent until the company abandoned the deal in February. The stock has rebounded since then, but is still down some 20 percent this year.
The company reduced its expectations for third-quarter revenue to 11.7 percent, its lowest percentage increase in at least five quarters. As a result, shares dropped close to 9 percent in after-hours trading.
In recent weeks, there has been increased attention on the viewership numbers for the second seasons of popular Netflix shows. Some, like the series “One Piece” and the anthology dramedy “Beef,” lost between 30 and 60 percent of their audience, according to the company’s engagement metrics.
“Our shows tend to start really big, while most other places, their shows start pretty small and occasionally grow from there,” Netflix’s co-chief executive Ted Sarandos said during a call with investors on Thursday. “Our Season 2 falloff is actually slightly improved this year relative to last year.”
He said the company had no plans to change how it released its shows.
The company also said it would release its half-yearly engagement report annually instead, starting in January. Last year, Netflix stopped reporting quarterly subscriber numbers.
The latest change did not sit well with analysts.
“Netflix is running a familiar play when a metric gets uncomfortable: It shifts the spotlight,” Mike Proulx, a Forrester Research analyst, wrote in an email. “When subscriber growth became a less reliable story, Netflix stopped reporting quarterly membership numbers. Now, as engagement faces more scrutiny, the company is reducing the frequency of that report”
For the first time on Thursday, Netflix explained that some of its shows were designed to keep customers while others were designed to acquire them. Live events like Major League Baseball’s Home Run Derby, which Netflix broadcast this week, don’t drive many views but do encourage new users to sign up.
The company also detailed how it was using artificial intelligence to improve the user experience with greater personalization and voice search functionality. In addition, the company used A.I. in the production process for more than 300 titles, it said. Most of its uses were in postproduction, with the tools helping to enhance crowds and add world-building establishing shots. “The American Experiment,” a five-part documentary series on the origins of democracy in the United States, featured 17 minutes of A.I.-enhanced footage.
Mr. Sarandos said on the call with investors that without A.I., “productions would have left out those key shots because they just wouldn’t have been able to afford them.”
-The New York Times
