Netflix growth opportunity ‘gigantic’ | 2017-04-19 |

Netflix growth opportunity ‘gigantic’

BBC     19th April, 2017 05:55:46 printer

Netflix growth opportunity ‘gigantic’

Netflix has grown slower than it expected in the first three months of the year, but insists that the opportunity for growth is “gigantic”.


The streaming firm added 4.95 million new subscribers in the quarter, fewer than the 5.2 million it had forecast.


In the US, the firm added a third fewer new members than the same period a year ago, while overseas members fell 22%.


Netflix blamed the drop partly on shifting some of its popular shows to the second quarter of the year.


The firm said its House of Cards series, which last year debuted in the first quarter but for this year has been pushed into the second quarter, was the main reason for the lower-than-expected subscriber growth.


Netflix said it still expected to add 8.15 million new members in total for the first half of the year, just below the 8.42 it added in the first half of last year.


By this weekend, the firm said it expected to reach 100 million subscribers globally.


“It’s a good start,” said chief executive Reed Hastings.


He said that the growth of the global internet meant the opportunity for the firm was still “gigantic”, and said the firm planned to continue investing in films and shows aimed at increasing its membership.


“We have come to see these quarterly variances as mostly noise in the long-term growth trend and adoption of internet TV,” he added.


The firm increased revenues by over a third to $2.64bn for the quarter compared to the first three months of last year, while net income rose to $178m from $28m.


Its shares fell in after-hours trading, dropping 3% with investors disappointed by the slower-than-expected growth.


Netflix said it would continue to focus on original programming, aiming to “please diverse tastes with a wide breadth of content”.


The company started making its own shows in 2013, with House of Cards one of its first big hits and Stranger Things more recently. Netflix plans to spend more on original content this year and reduce outlays on licensed material such as movies.