CFRA Research Director Ken Leon joined "Mornings with Maria" Tuesday to discuss the future of Netflix as the company is expected to report another massive subscriber slump and if streaming services are capable of handling a recession.
KEN LEON: ... March was disappointing. Subscriber loss is expected. Could it be 2 million? You know, we're talking about a base of 221 million. So that's kind of where we are. But the changes are significant. Netflix is saying how can we actually get more paid users by perhaps password changes? Another area is related to moving downstream from just pure streaming to advertising supported or a D.O.D. And they had the deal last week with Microsoft.
And additionally, the question is how does video streaming really hold up if we move into recession? So these are really some big macro questions for Netflix.
So I think for Netflix… it's a question of, you know, is the world so large that you can continue to grow subscribers? All of these businesses have been driven by subscriber growth and eventually making money, whether it's EBITDA or profitability. And the question for Netflix is, if you are a more mature company, then investors are going to begin to look at profitability. However you measure that.
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