on tuesday netflix inc’s nflx issued its first quarter earnings that portrayed a somewhat mixed picture with revenues topping wall street estimates and revenue coming in slightly below them some delays are expected to boost results later in the year yet there are also fears of a writers’ strike in the air that could significantly harm the streaming giant’s content production for the quarter ended on march 31st netflix gained 17 million subscribers around the globe which is significantly below the 23 million that wall street analysts had expected revenue rose 37 percent to 816 billion slightly below refinitiv’s expectation of 818 billion but net income dropped from 16 billion to 13 billion with earnings of 288 per share topped expectations netflix expects second quarter revenues to be roughly 824 billion less than the 847 billion expected by wall street analysts the boost from ‘paid sharing’ service is expected later in the year as the streaming giant has pushed back the account sharing crackdown in the us while it works on improving the quality of the new service saying goodbye to what got it started after 25 years netflix announced it will be winding down its dvd rental programme in september marking the end of an era as this service was the core of the company’s business model when it enter the playfield with intense streaming rivals like the walt disney company dis the once streaming pioneer is forced to focus more on profits even disney lost a net 24 million subscribers during the last three months of 2022 which is also its first decline since disney introduced its streaming star back in 2019 despite earnings topping wall street expectations thanks to theme parks even disney is undergoing significant transformation of its business model after netflix revealed last april it had lost subscribers for the first time in a decade it introduced two new initiatives that aim to boost revenue and profits the crackdown on password sharing and the introduction of a new advertisingsupported service which had its debut in november last year according to cfo spencer neumann this initative is still in “startup mode” this strategy is certainly paying off to roku inc roku whose business model is based on advertising with revenue sharing deals with the thousands of apps it hosts on its popular platform roku even joined forces with microsoft inc msft to improve the ad buying experience and optimize ad performance despite seeing a weakness in advertising market roku’s shares are 58 up year to date roku will also be laying off 6 of its workforce and is certainly not at its highest but 2022 was its secondbest year of growth with a net addition of 99 million active accounts and hours streamed growing even faster than user growth and when engagement is growing it’s all that matters in the end delay in crackdown of password sharing pushes benefits of the initiative to later in the year originally planned for the first quarter the wider launch of paid password sharing to the us and three other markets has been delayed to the second quarter consequently some of the membership growth and revenue benefits will be shifted from the second quarter to the third quarter moreover netflix’s service could see a modest shortterm dropin engagement but it is expected to recover over time despite the delays netflix is confident in achieving its fullyear targets despite the rollout delays netflix said it was confident it could hit its fullyear targets being pleased with the rollout of the initiative in canada new zealand portugal and spain crackdown of password sharing – an efficient strategy that takes time in its letter to shareholders netflix stated that its paid sharing service caused an initial “cancel reaction” after being launched in canada and spain although it had initially hurt the “nearterm” growth in membership numbers it ultimately resulted in higher subscriptions and revenue as the borrowers gave in and activated their own accounts in canada the paid subscriber base has expanded since the introduction of the service ceo ted sarandos warned of a devastating impact of the writers guild of america’s potential strike that could happen next month but he added a strong foundation of international content will equip netflix to weather this hollywood storm hoping that this scenario will be avoided netflix expects to spend about 17 billion in 2024 on content alone as it bears fruits of its password sharing crackdown considering that netflix estimates 100 million households to be sharing accounts which equates to about 43 of its global user base password sharing has undoubtedly been affecting its ability to invest in new content disclaimer this content is for informational purposes only it is not intended as investing advice