Netflix Stocks Plunge After Quarterly Updates

Streaming giant Netflix has seen a surge in sign-ups due to the coronavirus lockdown, but the company has warned investors that subscriber growth will slow.

Netflix added more than 10 million subscribers in Q2 of 2020, bringing the total of new subscribers to 26 million in 2020.

In contrast, Netflix saw 28 million new subscribers for the whole of 2019.

The company said: “Growth is slowing as consumers get through the initial shock of coronavirus and social restrictions.”

Netflix shares dropped in after-hours trading as investors received the company’s quarterly update.

Its revenue increased almost 25% to $6.1 billion, while profits rose to $720 million in the quarter, up from $271 million a year ago.

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The subscriber additions were far higher than analysts had expected.

While, some people might still end up quitting the service, the pandemic has clearly shown that Netflix is an indispensable part of viewers lives, analysts said.

Netflix also announced it was promoting chief content officer Ted Sarandos to co-chief executive.

CEO Reed Hastings told investors: “This change makes formal what was already informal – that Ted and I share the leadership of Netflix.”

Netflix was founded in 1997by Reed Hastings and Marc Randolph in Scotts Valley, California. The company’s initial business model included DVD sales and rental by mail, but Hastings abandoned the sales about a year after the company’s founding to focus on the initial DVD rental business. Today, Netflix produces and distributes content from countries all over the globe.