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Netflix (NFLX) Gives Green Light to Squid Games' Second Season

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Netflix (NFLX - Free Report) recently gave a green signal to the next season of its highly popular show — Squid Game. During the fourth-quarter earnings interview, the company’s CEO, Ted Sarandos, stated that the Squid Games universe has just begun. The rising demand and popularity of the show have boosted the planning process for the second season.

Squid Game is Netflix’s biggest ever TV show based on the fact that streamers worldwide have streamed the show for 1.65 billion hours during the first 28 days of its release.

Netflix has paid approximately $21.4 million for the first season of Squid Games. Per a Variety report which cited Bloomberg, the series will reportedly deliver $891 million in impact value.

Strong Competition Impacts Subscription Base Growth

Netflix confirmed in its 2021 earnings report that increasing competition had impacted its ability to attract new subscribers. Rising competition across the streaming industry due to the launch of services like Disney’s (DIS - Free Report) Disney+, ViacomCBS platform Paramount Plus, and AT&T’s (T - Free Report) HBO Max have affected its market share.

In the fourth quarter of 2021, Netflix reported 8.3 million net new paid memberships, lower than its projection of 8.5 million new memberships. For the full year of 2021, paid net adds were 18 million compared to 37 million in 2020.

For the first quarter of 2022, Netflix anticipates net adds to be 2.5 million new subscribers compared to 4 million in the year-ago quarter.

Netflix is banking on strong demand for its most-viewed show Squid Games, to regain lost market share. Other important original TV shows include Bridgerton, which will release season 2 in March, and Stranger Things, with Season 4 in the summer.

Zacks Rank & Stock Performance

Netflix currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past year, Netflix’s shares have fallen 12.3% compared with the Consumer Discretionary Industry’s decline of 18.1%. The Zacks Consensus Estimate for 2022 earnings has remained unchanged in the past 60 days at $10.70 per share.

Shares of Disney have slumped 13.8% in the past year. The Zacks Consensus Estimate for 2022 earnings has declined 2% in the past 60 days to $4.20 per share.

ViacomCBS shares have tumbled 25.2% in the past year. The Zacks Consensus Estimate for 2022 earnings has moved downward by 1.38% in the past 60 days to $ 3.62 per share.

AT&T shares have declined 6.3% in the past year. The Zacks Consensus Estimate for 2022 earnings has remained unchanged in the past 60 days at $3.45 per share.


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