Netflix growth misses mark despite strong earnings

SAN FRANCISCO: Netf lix subscriber growth missed its mark in the first quarter of this year, but the on- demand television star expects to hit the 100-million milestone this weekend.

Along with posting strong earnings on Monday, US-based Netflix reported a net increase of 4.95 million subscribers, most of those overseas where it has been investing in becoming a global entertainment network.

In comparison, Netflix gained 7.05 million subscribers in the prior quarter, raising expectations in the market.

“We have come to see these quarterly variances as mostly noise in the long-term growth trend and adoption of internet TV,” Netflix said in a letter released along with the earnings figures.

Netf lix finished the first quarter of this year with 98.75 million subscribers and predicted that its ranks would crest 100 million this weekend.

“That is a bit accomplishment,” Netf lix chief executive Reed Hastings said during a video briefing with analysts. “We are super excited.” The company expected it would add about 8.15 million subscribers overall during the first half of this year as compared with 8.42 million in the same period in 2016.

Netflix shares dipped and then rose in after-market trades that followed release of the quarterly earnings figures, eventually gaining more than a per cent to reach US$149.25.

Executives declined to reveal details about viewing trends at Netflix, but Hastings disclosed that people watch more than a billion hours worth of shows weekly at the service while Google- owned YouTube boasts that much viewership daily.

“We definitely have YouTube envy,” Hastings said.

“We are a little over a billion viewing hours a week, and YouTube has a billion a day so we have a ways to go to catch up.”

He downplayed competition, saying “entertainment is not a zero-sum game” and it is more about winning fans with content in the on- demand viewing market.

Netf lix has no interest in getting into the live television streaming game, so is not facing off with services such as PlayStation Vue, DirecTV and YouTube TV, according to executives.

Hastings saw Netf lix and rival Amazon Prime Video as competing more with people’s limited viewing time than they are with one another.

Both Amazon and Netf lix have been investing heavily in original programming to win subscribers to their on- demand video services.

Netf lix reported profit of US$178 million on revenue of US$ 2.64 billion in the first three months of this year as compared with net income of US$28 million on revenue of US$1.96 billion in the same period a year earlier. — AFP