“I think it’s really hard for these ads to be as effective as they used to be and it’s only going to get worse,” he added, pointing to Google-parent Alphabet Inc GOOGL -4.15% GOOG -4.26% implementing privacy changes akin to Apple inside the Android ecosystem.
Palihapitiya made his remarks regarding Netflix on the “All-In” podcast, which is hosted by well-known angel investor Jason Calacanis. The impact of Apple’s privacy measures, according to the venture capitalist, was first evident in the earnings of Facebook parent Meta Platforms Inc FB -2.11 percent. How to Trade Options on a Budget for Huge Wins in a Short Amount of Time Now is the time to register! (This is a limited-seating event.) “Netflix is a bit of a canary in the coal mine” in terms of the declining effectiveness of internet advertising, according to Palihapitiya.
On Netflix, Palihapitiya said the impact of Apple’s privacy measures was a “macro” factor while the “micro thing” was people churning out of a service “when there isn’t enough value.” “When you’re spending 20 billion dollars a year on content but people more than ever are leaving the service you have to inspect how much are you really spending in these areas.” Netflix rivals Walt Disney Co’s DIS -2.75% Disney+ and Apple’s streaming service were credited by Palihapitiya as having done better in the content arena.
See Also: How To Buy Netflix (NFLX) Stock. Why It Matters: Mark Zuckerberg-led Meta’s CFO, Dave Wehner, had said in the company’s fourth-quarter earnings call in February that Apple’s privacy changes will be a $10-billion headwind for the company. Palihapitiya said the cost of customer acquisition “is going up,” so companies that “live and die” on it are going to be on an “expensive road.”
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Netflix shares plunged last week after the company reported its first subscriber loss since 2011. In the first quarter of FY 22, the company’s revenue grew 9.8% year-over-year to $7.71 billion missing the estimate of $7.93 billion growth. Price Action: On Friday, Netflix shares closed 1.2% lower at $215.52 in the regular session. The shares declined another 0.8% in the after-hours trading. On the same day, Apple shares closed 2.8% lower at $161.79 in the regular session, according to data from Benzinga Pro.
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