Netflix growth falls short as programming fails to hook viewers

Netflix said in a statement that with movies like Roma, from Mexican director Alfonso Cuaron, "we are beginning to have our original movie offering mirror the success of our series". It expects to add another 8.9 million subscribers in the quarter that ends in March, the vast majority of which are expected to come from strong growth in its worldwide markets.

The results were announced two days after Netflix revealed plans to raise the price of a monthly subscription for USA consumer by $1-$2 per month, depending on the plan they are on.

"In the United States, we earn around 10 percent of television screen time", Hastings said, explaining that Netflix streams 100 million hours a day to TV screens in the USA, accounting for "billions" of hours a daily.

Management guided first-quarter paid net adds to be 8.9 million, which came in 6 percent ahead of what the Street had already modeled, Schindler said in a research note.

Netflix is refusing to remove from its hit movie "Bird Box" footage of the rail explosion that killed 47 people in Lac-Megantic, despite an appeal from the town's mayor.

Netflix's price hike raises an interesting question: at what price point will subscribers start leaving the service?

While investors seemed a bit disappointed, Wall Street analysts remained unfazed by the shortfall in the company's forecast.

Netflix licensed the footage of the disaster from the stock image vendor Pond 5 and used it in "Bird Box" in an early TV news montage to set up its horrific premise. "I don't know if this is happening all the time, but we are looking for assurances from Netflix that... they are going to remove them", Morin said in an interview, Canada's The Globe and Mail reported.

Netflix expects earnings per share of 56 cents on revenue of $4.49 billion, compared with Wall Street consensus estimates of 82 cents and $4.61 billion. "It will be interesting to see how Netflix responds to a future of smart, digital TV advertising and whether it will be forced into an ad-based model to sate the increasing consumer demand for exclusive and engaging content". Some estimates have projected that Netflix could spend upwards of $12 billion this year.

Unusually, Netflix revealed some viewing figures for its original content.

Management offered signs a long-term profit can be sustained, including operating margin ramp, decelerating marketing expense, and free cash flow burn improving after 2019. A Streaming Observer survey found 24 percent of respondents "might cancel" Netflix and 3 percent will "definitely cancel" in light of the price hike. Analysts surveyed by Bloomberg overwhelmingly rate the stock a "buy", and carry an average price target of $395 per share - around 16% higher from where the stock was trading on Friday.


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