Analyst: Netflix Streaming Use Dipped 4% in Q2

Netflix subscriber usage among its top 10 programs dropped around 4% in the second quarter, which ended June 30, compared with the previous-year period, according to new data from Piper Sandler analyst Thomas Champion.

Indeed, Netflix had a streaming hit with the fourth season of the original series “Stranger Things,” which tracked 7.2 billion minutes consumed across U.S. televisions a month ago. The tally is Netflix’s highest ever for an English-language show following the streamer’s global hit “Squid Game,” which tracked more than 1.6 billion hours in its first 28 days of release.

The analyst contends that while viewership of English-language programming increased 8% in Q2 over Q1, the initial response to “Stranger Things” was likely temporary.

“It’s possible COVID concealed an increasing crowded streaming market,” Champion wrote in a note.

Separately, the analyst believes Netflix could realize upwards of $1.4 billion in quarterly revenue from advertising. The streamer is planning to roll out a less-expensive ad-supported subscription tier by the end of the year. Champion said he believes the move could jumpstart sub growth, a good thing considering Netflix has projected an overall sub loss of 2 million in Q2.

Netflix reports second-quarter fiscal results on July 17.

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Wall Street Remains Bullish on Netflix

Wall Street’s love affair with Netflix continues. Research firm Piper Sandler found the subscription streaming video pioneer resonates strongly with subscribers regardless of pandemic or other societal issues.

Citing an internal survey, Piper found respondents said they plan to keep their Netflix subscriptions whenever the coronavirus pandemic ends. Netflix has seen record subscriber growth throughout the COVID-19 crisis, adding as many subs in six months as it did all last year.

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“Netflix has furthered its position as the go-to streaming option,” Piper wrote in a note, adding the aforementioned sub gains underscore Netflix’s long-held belief that consumers are migrating from linear TV to over-the-top video.

A key finding includes the fact most survey respondents indicated they would not be opposed to a price hike going forward — a reversal from a previous survey. Piper expects Netflix to raise its subscription prices in the next 12 to 24 months.

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Wall Street, which loves any attempt at increasing company revenue and operating margins, upped Netflix shares 0.7% in midday trading.

Noted one market observer, “Netflix is a strong brand like Tesla for young people — and they have the best original content [in] both quality and quantity.”