• Netflix is scheduled to release its earnings report on July 20, 2021, for Q2 2021. 
  • More than 100 million Netflix subscribers are located outside North America, with India ready to host a series production market. 
  • The need for original content has seen Netflix increase its budgetary allocation on production by more than 450% since 2017. 

Netflix, Inc. (NFLX) lost 1.05% on July 7, 2021, from the previous day’s close. It traded at $535.96 per share, with the pre-market price losing a further 1.18% as at 5:08 am to $529.69. It was not doomsday for the streaming giant whose share price has gained 8.68% over the past year and +5.32% in the last six months. 

Netflix, Inc. (NFLX) chart

Netflix is scheduled to release its earnings report on July 20, 2021, for Q2 2021 (fiscal quarter ending in June 2021). The consensus estimate for the earnings-per-share (EPS) is $3.16, representing a decline of 15.73% from the actual EPS at $3.75. 

Subscription strength

As of Q1 2021, the North American division (USA/Canada) had the highest number of subscribers at 74.38 million. It was followed by Europe/Middle East and the African segment at 68.51 million.  

Netflix Subscribers as of Q1 2021

Netflix Subscribers as of Q1 2021

Netflix subscribers have grown from 150 million to almost 210 million into Q2 2021. The spread of product pricing has also helped to improve the company’s business model with the willingness-to-pay factored in. American households with the largest subscriber base can pay fees up to $50/month, while other countries are attracted with fees starting from $5/month. The Indian market is a prime location, with Netflix announcing a series production. 

Despite a near-global shutdown in 2020, Netflix added 40 million paid ads in the pandemic year. However, the net ads were fewer by 10 million, going into Q2 2021, as the company expected to add 50 million paid (net) ads. It has found a home in more than 190 countries. With more than 100 million subscribers coming from outside the US, Netflix is expected to improve its streaming content and remove geographical restrictions to increase the subscription base.

Top original content production

Netflix saw most of its productions hit Nielsen’s top 10 content ratings. Lucifer took the top spot and helped to add subscribers with up to 1.838 billion minutes viewed in the week leading to June 6, 2021. The company has increased its financial obligation (by more than 450%) towards the production of original content from $3.1 billion in 2017 to $17.3 billion as of 2018.   

Top original content production

Productions by Netflix took up to 8 positions leaving the rest for Hulu and Amazon. 

To improve its in-house streaming platform for films, Universal Studios relocated its pay-one window to Peacock from HBO. The deal that is expected to begin in 2022 will put an end to HBO’s dominance over Universal films in terms of streaming control since 2005. Under this new licensing deal, popular movie and spin-off franchises owned by Universal will be accessible to Peacock. 

This move will also lower the release period for new films from close to a year to four months after their debut in theatres. It will also pull the popular title from Netflix as “Despicable Me.” Netflix is set to capitalize on its deal with Sony Pictures to stream theatrical releases. Taking over from Starz, Netflix is set to rake in $300 million until 2024.  

Technical analysis

Netflix (NFLX) formed a rounded bottom, with the pattern initiating an uptrend from June 11, 2021. We may see a short-term bullish continuation towards 545.49.  

Netflix (NFLX) chart

On Thursday, July 8th, the market closed above the 9-day EMA, signaling a possible continuation of the uptrend. There is also high buying momentum, with the 14-day RSI close to the overbought zone at 66.05. On the contrary, if a reversal occurs, it may push the prices to the resistance-turned-support at 508.38.