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Netflix announced their Q2 earnings recently. I have been pretty bearish on Netflix as a company, and I wanted to look at the earnings report and reflect on my opinions on the stock. One of the big reasons that I am not buying the stock is because I think that they will continue to lose subscribers because of the influx in competition. I think that many people will cancel Netflix for other platforms.
In their Q2 report, they announced that they lost almost a million subscribers. A lot of people looked at this as positive news as they were projecting a loss of 2 million subscribers. While shareholders should be happy that Netflix did not lose as many subscribers as expected, they still lost almost a million subscribers. That is still not good news for the company.
I am, however, very into the idea of a cheaper subscription with ads. I noticed that a lot of people are against this and think that this is a bad direction for the company, but I am actually a fan of the idea. I think that this will help Netflix make a lot of money. This tier will let Netflix monetize people that would have never otherwise given Netflix any money at all, and it will allow Netflix to report growth in users again. Depending on price, I would probably buy this option myself. I don’t mind ads as much as some people do, and it would be worth paying less money and seeing ads in my opinion.
I am still staying away from the stock though. There are other streaming services that I am far more bullish on like, for instance, HBO Max and Discovery. I recently made an investment into Warner Brothers Discovery who owns these two platforms, and I will be buying more shares over the next while. I previously stated that I am also more bullish on Disney+ than I am Netflix, and while Disney's stock has not performed very well lately, I do believe Disney+ will experience better growth than Netflix. Disney has some very valuable IP that I think will bring in a ton of subscribers.
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