Netflix appears ready to deliver strong quarterly results when reporting Wednesday's earnings late, but deeper issues arrive on the horizon as companies grapples with the loss of some of The most popular shows its and the movies in the traditional media companies that are getting into the streaming game.
Next year Netflix will see more competition than ever before, competing with streaming services launched from Disney, Comcast's NBCUniversal and AT & T & # 39; ; s WarnerMedia. That puts more pressure on Netflix to continue burning money while storing original programming to fill the space remaining from some of its most popular licensed shows.
And you can expect to be one of the biggest topics of discussion when Netflix reports its earnings after the bell: Where Netflix does not have mega hits like "Friends," "The Office" and a broad lineup of "Star Wars" and Marvel movies from Disney?
The latest season of "Stranger Things" sets a new record of viewership for Netflix, but it will have more than one or two major shows each year to keep subscribers interested.
But first, here are the hard analysts who rely on Netflix Tuesday afternoon:
- Earnings in every part: 56 cents expected, according to estimates of Refinitiv consensus
- Revenue: $ 4.93 billion expected, per Refinitiv
- ubscriber adders: 4.81 million, FactSet forecast
The good news for Netflix: It's already a massive head start when it comes to subscribers. As the U.S. subscriber progresses will look small compared to what we will see next to this Disney + launch in the fall, there are still plenty of room to grow internationally. There is almost no opportunity for any new streaming competitors to achieve the global scale of Netflix.
And according to an Information report, the original Netflix content team has changed its strategy to invest in shows and films that will attract and retain subscribers, rather than throw away everything they can to viewers and hoping something stick. (Like "Saturday Night Live" brilliantly parodied last year.)
That's probably a smart move.
Speaking from my own recent experience, scrolling through the Netflix home screen has begun to be more like channel surfing in the 90s than choosing from a carefully curated list of shows tailored to my taste. Netflix once prided itself on using its algorithm to suggest clock based items based on your history and taste. Now it forces generals of Adam Sandler comedies and "Birdbox" on your TV.
Compare that to the HBO strategy, covering only Netflix when nominations were filed by Emmy on Tuesday. While HBO is likely to adopt its library under its new AT & T owners, his chosen and curated approach to what it does every year has brought a better thing to watch .
When Netflix CEO Reed Hastings and his content head Ted Sarandos speaks to investors Tuesday night, they have to prove that they can simultaneously make more hits like "Unknown Things "as the subscribers are happy with the shows that will fill the holes left by" The Office "and" Friends. "
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.