Netflix, once a darling of Wall Street, is suddenly on the ropes.
The streaming giant will report its second-quarter earnings on Tuesday, and it’s shaping up to be one of the most consequential moments in the 25-year history of the company.
Netflix is having a terrible year. In April, the company reported that it had lost subscribers in the first quarter of 2022 – the first time that had happened in any quarter for more than a decade. Netflix’s stock subsequently burst into flames (it’s currently down about 70% so far this year), wiping out billions of dollars in market value, and the company laid off hundreds of employees....
...Netflix is pinning its hopes on potential savior: advertising.
The company announced Wednesday that it will partner with Microsoft on a new, cheaper ad-supported subscription plan. Despite Reed Hastings, Netflix’s CEO, being allergic to the idea for years, advertising is now a major part of Netflix’s plans to boost revenue going forward. The new tier will reportedly come before the end of 2022, but Netflix admits its nascent ad business is in its “very early days.”
The company is also focusing on clamping down on password sharing and focusing on creating compelling content to help turn the tide.
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