17 August 2019
Netflix's quarterly results showed that it lost US customers for the first time since 2011, while global growth also missed targets. Photo: Reuters
Netflix's quarterly results showed that it lost US customers for the first time since 2011, while global growth also missed targets. Photo: Reuters

Netflix global growth falls short, US customers shrink

Netflix said on Wednesday that it lost US streaming customers for the first time in eight years and that it missed targets for new subscribers overseas, Reuters reports.

Announcing its quarterly results, the firm revealed that its US customer number was down 130,000 in the three months to June, while growth in overseas markets also fell short of expectations.

The last time Netflix lost US subscribers was in 2011 following an uproar over a price hike and a plan to split its DVD-by-mail and streaming services, the report noted.

The company said its slate of new shows during the April-June quarter was not as appealing as expected and price increases in some markets dented growth.

Netflix reported that it added 2.83 million paid streaming subscribers outside the United States, below analyst expectations of 4.8 million, according to IBES data from Refinitiv.

“Our missed forecast was across all regions, but slightly more so in regions with price increases,” the company said in a letter to shareholders.

“We think Q2’s content slate drove less growth in paid adds than we anticipated,” it said.

Netflix raised prices in Britain, Switzerland, Greece and Western Europe during the second quarter.

Chief Executive Reed Hastings said on a video call with analysts that the company’s internal projection still showed it expects to end 2019 with more new subscribers than it added in 2018.

Netflix, the world’s dominant subscription video service, currently boasts 151.6 million streaming customers worldwide.

“I think our position is excellent,” he said.

Netflix has staked its future on global expansion and creating original TV shows, movies and documentaries to attract new customers and keep the existing ones paying monthly subscription fees.

Looking ahead, Netflix projected that it would add 7 million paid streaming customers in the third quarter with help from a new season of supernatural thriller “Stranger Things,” released on July 4. 

But looming in November is the launch of Disney+, seen as a formidable entrant into the streaming market, and original programming from Apple.

AT&T and Comcast have also said they plan their own offerings next year.

In the second quarter, Netflix saw its net income fall to US$270.7 million, or 60 cents per share, in from 85 cents a share year earlier.

Total revenue rose to US$4.92 billion from US$3.91 billion. Analysts had on average expected revenue of US$4.93 billion.

Netflix shares sank nearly 12 percent in after-hours trading after the quarterly results announcement and subscriber numbers data.

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