This Jan. 29, 2010, file photo shows the company logo and view of Netflix headquarters in Los Gatos, Calif. Netflix's normally lighthearted Twitter account took on a more somber tone on Saturday, May 30, 2020: "To be silent is to be complicit. Black lives matter. We have a platform, and we have a duty to our Black members, employees, creators and talent to speak up." (AP Photo/Marcio Jose Sanchez, File)
By Michael Liedtke and Tali Arbel
Netflix added a flood of new subscribers amid the coronavirus pandemic and also offered clues to a possible successor for founding CEO Reed Hastings, who on Thursday named the company's chief content officer, Ted Sarandos, as co-CEO.
"Ted has been my partner for decades. This change makes formal what was already informal — that Ted and I share the leadership of Netflix," said Hastings in a statement.
The company picked up 10.1 million worldwide subscribers during the April-June period, more than triple what it usually adds in that period.
The increase announced Thursday with Netflix's second-quarter earnings eclipsed the gain of 8.3 million subscribers projected among analysts polled by FactSet. Netflix ended June with 193 million worldwide subscribers, including 70 million in the U.S. and Canada, its largest geographic market.
Nearly 26 million of those subscribers have joined Netflix during the first six months of this year — more than double the number compared with last year — as the pandemic curtailed travel and even nights out on the town. The restrictions have turned out to be a boon for Netflix, which also faces a slew of new streaming competitors such as Disney Plus and HBO Max.
Netflix Inc., however, said its subscriber growth has begun to slow after it added just 2 million fewer customers in the past six months as it did for all of 2019. It forecasts just 2.5 million new additions for the current quarter.
The pandemic has shut down Hollywood, limiting the ability of TV and movie studios to produce more entertainment to feed Netflix and other video streaming services. That could limit their appeal if viewers run out of new things to watch. Netflix said Thursday that it is slowly resuming production, mostly in Asia and Europe, and its 2020 lineup remains intact. Shooting delays mean big shows and movies slated for next year will come out more in the second half of 2021.
People spending more time at home due to the pandemic has "massively accelerated the shift" from traditional TV to streaming video," said eMarketer analyst Eric Haggstrom in an email. That bodes well for Netflix, the streaming pioneer. "Even as lockdowns are relaxed and new competitors begin to scale their services, Netflix will extend its lead as the first stop for entertainment." He predicts that Netflix will get one-third of streaming subscribers globally in 2020.
The Los Gatos, California, company's extraordinary expansion helped Netflix earn $720 million on revenue of $6.15 billion during the second quarter.
Investors have been betting the pandemic will make Netflix more popular than ever. Since public health experts officially declared the pandemic on March 11, Netflix's stock has soared by 50 percent.
The shares tumbled 10 percent to $473.24 in Thursday's extended trading after the subscriber growth numbers came out.
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A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
