Cowen Trims Netflix Q1 Forecast on Suspension of Russian Subscriptions

Cowen downgraded its forecast on Netflix Q1 net subscriber additions due to the impact of the war in Ukraine. It now expects global paid net additions of 1.45 million subscribers for the quarter, compared with pre-war guidance of 2.55 million, amid the suspension of about a million Russian subscription accounts, wrote analyst John Blackledge in a Tuesday note to investors. “Netflix still holds a wide lead in living room TV, even as TikTok gains mobile video viewing share,” said the analyst. Netflix shares are down 31% since its Q4 earnings report on Jan. 20 reflecting “pressure on shares of companies that fared well during the pandemic,” Blackledge said. Original content volume picked up last year and should drive higher engagement and potentially reduce churn, he said. Cowen’s monthly survey of 2,500 U.S. consumers showed Netflix still holds a “wide lead” in living room TV viewing, while holding “relatively steady” in mobile. On which apps or websites respondents used most often to watch video content on their smartphone, 34% ticked YouTube, down from 42% in Q1 2021, he said. Facebook slipped 5 points to 17%, followed by Netflix with 12%, TikTok at 9% and Instagram 6%. Europe, the Middle East and Africa was the largest contributor to Netflix paid net adds in Q4, said the company Jan. 20. Netflix reports Q1 earnings April 19.