Netflix heads into showdown with slowing subscriber growth
FRANCISCO (AP) — Netflix’s subscriber growth is bogging down even before the leading video streaming service confronts high-powered threats from Apple and Walt Disney Co.
The latest sign of the September, below the 7 challenges the company million customers forecast is facing emerged by the Los Gatos, Wednesday with the release California, company. Just of its third-quarter 520,000 of those subscribers results. The numbers were picked up provided further evidence in the U.S., below the that Netflix’s salad 800,000 that management days may be over, particularly anticipated. The in the U.S., shortfall came after where most households Netflix lost 123,000 subscribers that want its 12-year-old in the U.S. during streaming service already the April-June period, have it. marking its first contraction
Netflix added 6.8 million in eight years. subscribers worldwide The latest miss on from July through U.S. subscriber growth “spells trouble for the company ahead of heightened competition,” said eMarketer analyst Eric Haggstrom. “The fourth quarter represents a completely new ballgame for Net fl i x.”
Uncertainty about Netflix’s future growth is the main reason the company’s stock had dropped by about 30% below its peak price of $423.21 reached 16 months ago. Netflix’s shares surged 10% in ext ended trading Wednesday, apparently because some investors had been bracing for an even bigger letdown in the third quarter.
Netflix said it expects to add another 7.6 million worldwide subscribers during the final three months of the year, down from 8.8 million during the same period last year in an acknowledgment of the fiercer competition.
“The launch of these new services will be noisy,” Netflix advised in its third-quarter letter to shareholders. “There may be some modest headwind to our nearterm growth, and we have tried to factor that into our guidance.”
The big question now is whether some of Netflix’s existing subscribers will decide to cancel its service and defect to cheaper alternatives that Apple and Disney will launch within the next month.
- AP