Netflix has had a pretty rough week

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On July 17, the company released its Q2 shareholder letter and reported a nearly 50% miss on projected paid subscriber growth, writing, “Paid membership grew by 2.7m, less than the 5.5m in Q2 a year ago and our 5.0m forecast.”

The miss precipitated a more than 10% plummet in Netflix stock, as investors are left asking: Why the sudden drop in subscriber growth?

According to Netflix’s shareholder letter, the drop comes down to Q2’s content enticing fewer viewers than expected, and a price hike for Netflix subscriptions turning off some users. The silver lining, it suggests, is that “much of our domestic, and eventually global, Disney catalog, as well as FriendsThe Office, and some other licensed content will wind down over the coming years, freeing up budget for more original content…From what we’ve seen in the past when we drop strong catalog content (Starz and Epix with Sony, Disney, and Paramount films, or 2nd run series from Fox, for example) our members shift over to enjoying our other great content.”

Netflix may remain confident in its continued shift away from aggregating licensed content and toward producing original work, but other companies are smelling blood in the water. While competitors that dominate headlines are typically entrenched giants—Disney, NBC, HBO, as well as tech companies like YouTube and Apple—there is a newer crop of startups growing in the space, as well:

  • Tubi, an ad-supported free streaming platform, plans to spend over $100 million on content in 2019, having already licensed The Bachelor this year.
  • Viacom closed a $340 million acquisition of Pluto TV, a Tubi competitor, in March.
  • Overtime, a sports-focused streaming service, announced a $23 million Series B in February.
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For a long time, it seemed as if Netflix had the media world in its grip, licensing the most popular content, producing even more on its own, and offering it all ads-free for a low subscription price.

But as licensing costs (and Netflix subscription prices) have increased, the market is fragmenting. Users are switching to other services or turning to piracy instead of paying for multiple streaming subscriptions. For the first time in a while, there is room to build in Netflix’s shadow

https://angel.co/newsletters/netflix-stock-slammed-156

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Engr. OluKayode Adedayo is an engineer with many years of experience in the information Technology and Telecommunications field though he read electrical engineering and started off with electrical engineering building services design consultancy before focusing on Information and Communication Technology which was his passion. He graduated from the University of Ilorin; Kwara State in 1992/93 He is a Chief Ideas Technocrat and Visionary with great ideas and a solutions consultant in ICT and e-governance. He was a Consultant in the audit of core engineering assets of the Liquidation of Nitel/Mtel He was international startup partner to a top Wireless Service Assurance OEM tool company and a few other companies always trying to bridge the technological gap between developed countries and Nigeria by partnering with cutting edge companies. He was involved in engineering business development between Huawei & MTN. He developed the first Pinging software with MS-DOS 6.22 used in CBCLN bank in 1998. He is a also a certified professional of a UK Project Management Institute. Presently he is researching new solutions that can be developed and used to ease day to day problems from RMS, Man to Machine, V2X, IoT, AI, TeleMed and some few other emerging technologies. He created an ICT Pro-Social Network Blog ( including 3 other blog for 3other sectors) with generating advertising revenue and owns many group for promoting ICT Business and careers and members and visitors are from worldwide on the site and LinkedIn. He is a Corporate Member of the Nigerian Society of Engineers. CNSE He is married and blessed with three children.
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