Netflix mentioned the term "inflation" just once in its first-quarter letter to shareholders, in which it outlined the factors that the streaming company believes have stalled its once incendiary growth.
Inflation was rattled off as part of a group of "macro-economic" factors, including Russia's invasion of Ukraine, that were collectively ranked fourth and last on a numerical list of reasons Netflix gave for its suddenly halted customer and revenue expansion. The supply chain's impact on smart TV proliferation, password sharing and competition from new Streaming Wars competitors were listed as Nos. 1-3.
However, asked last week by French newspaper LeJDD about his company's business woes, Netflix Co-CEO Ted Sarandos seemed to lead with inflation's impact on household budgets.
He also mentioned Russia and slowing shipments of smart TVS, but the messaging now seems to prioritize the macro-economic at the top, with Sarandos noting, "Every customer is asking the question of the value of a subscription in relation to its cost."
While Netflix seems to have honed its corporate messaging in on the economy since its April 19 "Black Tuesday" Q1 earnings report, forecasters on the outside are beginning to foretell bleak predictions for Tuesday, July 19, the day Netflix delivers its second-quarter earnings report.
Writing for subscription newsletter The Ankler, for example, Entertainment Strategy Guy suggests that Netflix -- which forecasted 2 million lost subscribers globally in Q2 -- could have lost that number in the U.S. and Canada alone from April - June.
The "ESG" says recent research reports from Antenna, Hedgeye Risk Management and Sensor Tower are the basis for this dour prediction.
