2 Redeeming Qualities of Netflix’s Latest Report

If you didn’t know, Netflix (NASDAQ:NFLX) just released its report for the fourth quarter. Sadly, many investors were disappointed since it was a weak quarter overall.

Because of it, the company’s stock dropped by 22% this past Friday. An understandable shift? Yes, but that is not to say that bad news was all that this report had to show for it.

This article will go over the few positive aspects of Netflix’s fourth quarter.

A Price Increase Will Help Retain Profitability

One of the “darker” aspects of this report was realizing that first-timers aren’t subscribing as they used to, which means that, as of today, Netflix only counts with its preexisting user base for all its platform needs.

Having said that, Netflix had just increased its entry price a week before this report’s release. Under normal circumstances, the company would do this to cash in from the people coming in for the first time. (Keep in mind, they usually came in masses.)

However, it is now clear that it is trying to cash in as much as possible from all existing users. A desperate and risky maneuver? Yes, because people can respond by ending their subscriptions. But we’ve got to give credit where it’s due: Netflix is doing the best with what it’s got. 

At least this way, the company can stall until it figures out how to bring new customers. Not only that, but it can recover some of the money that’s been lost in the past weeks.

A Presence in New Markets Might Bear Fruit Soon

Likewise, investors should remember that 2021 was a different year for Netflix. Not only did it launch its first official merchandise store during the year, but it also released ten mobile games based on its properties.

Reputation-wise, Netflix is a leading force in pop culture. Most of the company’s original content becomes an essential part of it, leading to widespread recognition and love from the fans. So it stands to reason that Netflix can cash in a little more from such properties.

Henceforth, this merchandise store and these mobile games. Of course, the company’s primary source of revenue will always be its streaming platform. But a little extra can still go a long way. 

The company is currently planning to expand upon these ventures. So we can also expect some growth in these divisions.