The news: Netflix earnings showed the streaming company remaining strong through a quarter that saw dramatic changes to its business and a Hollywood strike that put a stop on its domestic content pipeline.
The biggest news: Two bits of major Netflix news dropped just before the earnings. The first was the removal of Netflix Basic, the company’s cheapest ad-supported tier, in the US and UK. The second was that Netflix’s ad-supported tier has hit 1.5 million subscribers, according to The Information.
Weathering the strike: The Writers Guild of America has been on strike since May, and the Screen Actors Guild joined them last week. The movement is no small obstacle for Netflix and other streaming services, but the company clearly feels that it’s well-equipped to hold its ground if the strike rages on for months.
Our take: Netflix increased its third-quarter outlook, but concerns about the impact of the strike and softer-than-expected revenues mean there could still be trouble ahead. Still, revenues and users are both up significantly, showing that Netflix is reaping rewards from price hikes and ad-supported tiers after several quarters of decline and concern about market saturation.
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