Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Sign up for Axios NW Arkansas
Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters
Netflix will bleed more cash this year than analysts expected, but the payoff won’t be more subscribers.
Driving the news: In its earnings report, Netflix said it expects its free cash flow deficit to be $3.5 billion this year — more than the $3 billion loss it previously estimated (the company says it's because of a change in corporate structure and investments in real estate and infrastructure).
- Netflix also dialed back its expectations for subscriber growth, "anticipating a net add of 5 million paid subscribers for the second quarter," which is below Wall Street’s expectations for 6.09 million new paid members, as Axios’ Sara Fischer reports.
- CEO Reed Hastings said last quarter that this year would be the peak for cash burn: "We’re still expecting free cash flow to improve in 2020 and each year thereafter, driven by our growing member base, revenues, and operating margins."
Why it matters: Wall Street has given Netflix’s cash burn a pass. The spend on content usually translates into more subscribers driven to the platform for said content. But investors’ knee jerk reaction was to sell the stock after its less-than-stellar guidance.
- The stock rebounded after initially falling as much as 5% after the bell on Tuesday.
What to watch: With the launch of Disney+, viewers have yet another, cheaper option. This isn't lost on investors. Analysts, however, point out that streaming is not necessarily a zero sum game.
- Of note: In the face of the heightened competition, Netflix is raising — not cutting — its monthly cost.
Go deeper: The revenue battles of Big Media vs. Netflix