Stockapps has estimated that streaming video service Netflix could lose as much as $1 billion by the end of 2022. At the same time, the platform’s operating profit slips to 19% from 21% a year ago. This forecast is based on the expectation of further strengthening of the dollar and an increase in the cost of creating new content.
Due to the global coronavirus pandemic, the platform gained 36 million new subscribers in 2020, but growth slowed in 2021. Stockapps estimates that Netflix’s revenue last year was in line with analysts’ expectations. At the same time, the platform was spending more money on creating new content and trying to grow its user base. This, along with other factors, is expected to result in lower operating income in 2022.
Netflix itself believes that the company “Still on track and probably too early for investors”. The company is also expected to lose $1 billion as the dollar grows. Currently, the platform is focused on creating new content to expand user audiences and retain existing customers. Netflix remains committed to its long-term strategy, making price adjustments in the medium term and investing in the business in the short term. The platform continues to grow in the number of paid video streaming subscribers, which is the company’s biggest source of revenue amid increasing competition from online cinemas.