In summer, love is not eternal at Netflix

Wall Street expects a turnover growth of 26% over the previous year of 26%, with more than 5 million new paying subscribers, which should be added to the workforce of the company. However, the third quarter is expected to be even more successful, thanks to the new seasons of several of the company's most popular shows, including "Stranger Things" and "Orange is the new black." Analysts forecast about 7.7 million new subscribers for the quarter. ending in September.

As investors look into next year and beyond, things are starting to change. While Netflix is ​​the undisputed leader in the industry with nearly 150 million subscribers worldwide, the choice of streaming services is becoming increasingly important. New services of the tastes of

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Apple, WarnerMedia, and NBCUniversal are coming in, and in some cases, will be broadcasting high-profile shows such as Netflix's "Friends" and "The Office".

These older shows still count a lot. An analysis by Nielsen and the Wall Street Journal revealed that licenses for the main Netflix originals were presented in minutes. Nielsen estimates that "Friends" is the second most-watched show on Netflix last year after "The Office".

The good news is that the Netflix originals are ringing. The last season of "Stranger Things", which was interrupted on July 4, was seen by more than 40 million households during its first four days, according to the company. That means that about a quarter of paid subscribers around the world watched the show.

But the originals are not cheap. In 2013, Netflix spent $ 4.5 million, an episode announced, when it started making "House of Cards". Today, it almost looks like a radical change. According to the Wall Street Journal, new shows in competition cost between $ 8 and $ 15 million per episode. Netflix has spent money over the past seven years and expects to spend about $ 3.5 billion this year.

It clearly can not last forever. In its latest quarterly report, the company said it expects an improvement in free cash flow next year and beyond. And not having to shell out for big licensed shows saves money, although it also increases the pressure to continue producing its own successes.

Netflix commands a rich multiple of 82 times the anticipated profit precisely for its success in continuing to attract new subscribers. The biggest risk is that growth will slow as new entrants with larger pockets spend money on creating faster market shares. Increased competition in other new industries, such as carpooling and food delivery, also weighed on profitability and growth.

Although it may seem unlikely that the hand of a player as dominant as Netflix is ​​released, strange things have happened.

Write to Laura Forman at [email protected]