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Illustration:Rebecca Zisser/Axios

Netflix's stock was down more than 12% in after-hours trading on Thursday after the entertainment giant said it missed analyst expectations on earnings-per-share and added fewer subscribers than expected during the second quarter.

Why it matters: Netflix was supposed to be a safe bet for investors this quarter. Third-party measurement companies like Nielsen and Parrot Analytics suggested throughout the quarter that the entertainment giant was pulling ahead of competitors in the U.S. in terms of consumer engagement during the pandemic.

Driving the news: Netflix also named Chief Content Officer Ted Sarandos as co-CEO of the company, alongside chief executive Reed Hastings, in its earnings release.

  • Hastings and Sarandos have worked together for many years and have known each other for over two decades.
  • Hastings said he does not anticipate that day-to-day operations at Netflix will change much.

The big picture: Executives said in a shareholder letter that growth slowed this quarter due to the easing of lockdown restrictions and the initial shock of the coronavirus pandemic wearing down. Netflix also alluded to new competition from TikTok, the short-form video app owned by Chinese company ByteDance.

  • "TikTok’s growth is astounding, showing the fluidity of internet entertainment. Instead of worrying about all these competitors, we continue to stick to our strategy of trying to improve our service and content every quarter faster than our peers," the executives wrote.
  • Be smart: Netflix has in the past suggested that any service that dominates users' time is a competitor, include Epic Games' hit video game Fortnite.

By the numbers, per CNBC:

  • Earnings per share (EPS): $1.59 vs. $1.81 expected, according to Refinitiv survey of analysts
  • Revenue: $6.15 billion vs. $6.08 billion, according to Refinitiv
  • Global paid net subscriber additions: 10.09 million vs. 8.26 million expected, according to FactSet

What's next: Netflix will hold a video Q&A presentation for investors at 6pm ET.

Go deeper: Netflix's earnings over the past year:

Go deeper

Oct 21, 2020 - Economy & Business

Quibi says it's shutting down

Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Quibi, the mobile-only video subscription streaming service, is shutting down, the company announced Wednesday. The company said the decision was made to preserve shareholder equity.

Why it matters: Quibi had struggled to hit its subscriber growth targets amid the global pandemic. The app launched six months ago.

Oct 21, 2020 - Economy & Business

Report: Quibi shutting amid pandemic struggles

Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Quibi, the mobile-only video subscription streaming service, is shutting down, The Wall Street Journal reports. The company raised a whopping $1.75 billion to get the app off the ground from Alibaba, as well as Hollywood behemoths like Walt Disney Company, NBCUniversal and AT&T's WarnerMedia.

Why it matters: The company has struggled to hit its subscriber growth targets amid the global pandemic. Sources tell Axios Quibi was running out of cash.

Democrat Mark Kelly sworn in to U.S. Senate

Photo: Courtney Pedroza/Getty Images

Astronaut Mark Kelly (D) was sworn in to the U.S. Senate on Wednesday after defeating incumbent Sen. Martha McSally (R-Ariz.) last month for the seat once held by the late Sen. John McCain.

Why it matters: Kelly's swearing-in by Vice President Mike Pence narrows the Republican majority and moves the Senate balance to 52-48.