Netflix falls short on new subscribers as pandemic boost fizzles

In this news, we discuss the Netflix falls short on new subscribers as pandemic boost fizzles.

(Reuters) – Netflix Inc NFLX.O on Tuesday posted the lowest subscriber gains in four years as streaming competition increased, pandemic restrictions were relaxed and live sports returned to television.

The company added 2.2 million paying subscribers globally in the quarter that ended September 30, missing Wall Street’s target of 3.4 million and its own forecast. (Graphic: tmsnrt.rs/3jhdq7e)

Earnings per share also landed below analysts’ expectations at $ 1.74. The consensus forecast was $ 2.14, according to IBES data from Refinitiv.

Shares of Netflix, one of the biggest gains this year as people stayed home amid the pandemic, fell almost 6% to $ 494 on Tuesday after hours.

“Domestic subscribers were almost stable, which highlights the saturation of Netflix in the United States,” said Ross Benes, analyst at eMarketer. With domestic additions slowing, the revenue growth will likely come from rising prices, he said.

The company reported a successful quarter at the start of the global coronavirus pandemic, adding 15.8 million paying customers from January through March.

Netflix had warned investors that a sudden surge in new listings would disappear in the second half of the year with the easing of restrictions on COVID-19. Netflix predicts that in the fourth quarter, it would attract 6 million new subscribers globally, or 6.51 million that analysts were expecting.

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The streaming video pioneer is trying to gain new customers and push back the competition as viewers embrace online entertainment. During the third quarter, Netflix released “Emily in Paris”, “Enola Holmes” and “The Devil All the Time”.

Netflix acknowledged that the competition was increasing as Hollywood studios, from Walt Disney Co DIS.N to TN WarnerMedia to AT&T Inc, restructured to compete more directly with video subscribers.

“The competition for time and consumer engagement remains vibrant,” Netflix said in a letter to shareholders.

In recent months, major sports have taken over the game, and nascent streaming services including AT&T’s HBO Max and Comcast Corp’s CMCSA.O Peacock have offered new options to audiences.

Netflix said its results reflected the fact that it saw such a surge in customer numbers at the start of the year.

“We continue to view quarterly fluctuations in net additions paid as insignificant in the context of the long-term adoption of Internet entertainment, which we believe is still early and should provide us with many years of strong growth to continue. to improve our service, ”the company said.

Netflix has said it expects to complete filming on more than 150 productions by the end of the year and will release more original shows in each quarter of 2021 compared to 2020.

Revenue rose 22.7% to $ 6.44 billion in the third quarter, beating past estimates of $ 6.38 billion.

Net income rose to $ 790 million, or $ 1.74 per share, in the quarter, from $ 665.2 million, or $ 1.47 per share, a year earlier.

Reporting by Ayanti Bera in Bengaluru and Lisa Richwine in Los Angeles; Editing by Anil D’Silva and Lisa Shumaker

Original © Thomson Reuters

Originally posted 2020-10-21 04:46:12.

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