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Netflix loses subscribers and may have ads
Netflix announced in its balance sheet this Tuesday (19) that it lost 200 thousand subscribers from January to March this year and projects that more 2 million will leave the platform in the current quarter.
Faced with the negative result, Reed Hastings, CEO of the company, said that the company is considering offering a version with lower prices and with ads on the platform. It would be a turnaround for the subscription-based business model.
Market reaction to the drop in subscribers was abysmal and stocks plummeted 25% in negotiations held after the end of trading in the US.
in numbers: it was the first time that the leader of streaming lost subscribers since 2011. To get a sense of the fall, the estimate made in January by the company, that its base would grow 2.5 million in the period, had already dropped the shares at the time.
Netflix closed the quarter with 221.6 million of subscribers. Based on the share price on Tuesday, before the release of the balance sheet, the shares had accumulated a fall of more than 40% in the year.
What explains: the company stated in its result that two main factors are hampering its growth in some markets:
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Shared accounts: the streaming leader pointed out that, despite having 222 million subscribers, 100 millions accounts are shared with people from other households.
In response, the giant last month announced tests in Chile, Costa Rica and Peru to charge a fee for accounts shared with residents of other homes. The extra amounts charged vary between US$ 2 and US$ 3.
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Competition: the big media groups didn’t come to play in the streaming market and threaten the reign of the pioneer Netflix.
- The first big result of Disney+’s investments came in the last quarter of last year, when it overtook Netflix for the first time in the number of new users. Its base grew by 11.8 million in the period, to 129.8 million of subscribers.
Impact on results: Netflix also attributed the drop in subscriber numbers to its decision to suspend service in Russia following the invasion of Ukraine, which resulted in the loss of 700 thousand customers.
The partnership between Mercado Livre and Gol
Mercado Livre entered into a ten-year partnership with the airline Gol to deliver parcels across the country, especially to the North and Northeast regions.
In numbers: with the agreement, the ecommerce leader in the country expects to reduce by up to 80% delivery time for longer routes, such as North and Northeast, and up to 50% to the Midwest.
- An order to Manaus, which previously took eight to nine days, will arrive within 48 hours, a period that will also apply to residents of most capitals in the Northeast, who previously expected three to four days.
- The flights will depart from São Paulo and a third of the fleet will serve the South and Southeast regions. Gol’s six aircraft are in addition to the three that Mercado Livre already has, as a result of agreements with Sideral and Azul Cargo. The number of annual air orders will increase from 10 million to 40 million.
why it matters: in the fierce competition of national ecommerce, in which asian sites have been gaining ground and large retailers are investing heavily in technology and logistics, delivery time is a differential to win over customers.
And Gol in all this? This year alone, the partnership will yield BRL 100 million for your cargo and ordering arm. In five years, the projection is for an increase of BRL 1 billion in the company’s revenue.
The agreement also avoids the cost of returning these aircraft under the leasing contract. There is also the possibility of adding another 6 cargo aircraft by 2025.
Free Market in Brazil: the marketplace founded in Argentina has spared no resources to maintain its leadership in its largest market.
Last month, it announced that it would invest R$ 17 billion in the country in 2022, a growth of 70% compared to the previous year. Most of the money should go to Mercado Pago, a fintech of the group that offers digital wallet, bank account, business loans, etc.
Eletrobras privatization at risk
Market analysts and government officials already consider that the privatization of Eletrobras this year could go through the roof.
An expected request for a review of the process that is running in the TCU (Union Court of Auditors) should definitely disrupt the company’s privatization plans in 2022.
Understand: In the trial scheduled for this Wednesday (20), Minister Vital do Rêgo, who has been critical of the process since the first trial in court, must ask for a view to analyze the vote of the rapporteur Aroldo Cedraz.
Within the court, however, there is an expectation that an agreement will be reached so that the stoppage period is less than the 60-day limit.
Calendar: the deadline is important because the window for privatization in the first half of the year is closing. In order for the stock offering to be concluded by May 13, the operation would need to be launched by April 27, that is, one week from now.
Otherwise, the process would wait for the second semester, when the electoral campaign enters the decisive phase and should alienate investors, say market analysts.
Remember: the privatization of Eletrobras was planned to be carried out with new issuances of shares in Brazil and the USA, reducing the Union’s share in the company, today from 70%, to 45%. In this second judgment at the TCU, the ministers will discuss the minimum share price.
Two sides: PT parliamentarians filed lawsuits in Justice and TCU on Monday to try to prevent the process. Former president Luiz Inácio Lula da Silva, who leads polls for the presidential election, has already declared that the party does not support the operation.
On the other side is President Jair Bolsonaro (PL), who wants to see privatization completed in the first half of the year so he can use it as a campaign banner for his reelection.
take a break
- To watch “Icahn: The Tireless Billionaire” – in the HBO Max catalog.
Carl Icahn, 86, is considered one of the biggest “activist investors” in the US.
Understand: this type of market agent usually buys shares in companies that he considers to be undervalued because of bad management and puts pressure on the company’s management to handle it in the way he sees fit.
- Today with a fortune of $16.5 billion ($76 billion), Icahn got his start in the business as a stockbroker on Wall Street in the 1960s — after earning a university degree in philosophy.
- He has a reputation as a ruthless financial “shark” for the hostile purchase (similar to what Musk wants to do with Twitter) of several relevant companies such as Netflix, PayPal and Herbalife.
Eccentric: Icahn is also a great character, as you can see in the documentary.
- Some of his quotes highlighted in the book are “I made so much money because the system is so bad, not because I’m a genius” and “Wall Street workers get paid far more than they should.”
- On Twitter, he has already defined himself with the phrase “Some get rich studying artificial intelligence. I make money studying human stupidity.”
- The American billionaire, however, doesn’t just accumulate hits, and sold the stake in the fund he managed in Apple in 2015, worried about the company’s prospects in China. Since then, the company’s shares have appreciated by more than 225%.
In addition to the economy:
- Electoral cable: podcast explains the race of bolsonaristas to hide videos on YouTube; listen up.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
