Netflix’s Q1 2023 results suggest strong future revenue growth from its ad-supported tier and upcoming account-sharing curbs. We share some rough math to illustrate. Listen on to learn more.
Top news stories (1:00)
Netflix has a decent Q1 2023 (11:30)
The company added 1.75 million subscribers globally. Growth was negligible in the US and Canada. APAC grew the fastest, with Europe and LATAM doing quite well. The growth in APAC could be because Netflix cut prices in many of those countries.
Impact of the introduction of account-sharing curbs (14:30)
Netflix will introduce password sharing in the US in Q2. People will be asked to pay extra for a second location, and those that get cut off will be asked to subscribe. Netflix’s experience with the curbs in Canada suggests it won’t have a lasting impact on subscriber churn.
Progress in monetizing the ad-supported tier subscribers (20:00)
Netflix revealed data in the earnings call that suggests it is making $8.50 in monthly ad revenue for each subscriber watching ads. Netflix suggested the margins on the ad revenue are at least 50% and may go higher. Will and I are bullish on the company’s ability to grow the ad business from here. They have yet to introduce mid to lower-funnel ad features, which will improve the performance.
Netflix to shutter DVD.com, Chicken Soup for the Soul wants it (33:50)
This week, Netflix announced it would shutter its DVD.com business, shipping its last DVD in September 2023. Also, this week, Chicken Soup for the Soul Entertainment announced it would put 1500 new DVD kiosks in Dollar General stores nationwide. Bill Rouhana, Chairman and Chief Executive Officer of Chicken Soup for the Soul Entertainment, Inc., said he was interested in purchasing Netflix’s DVD business.
