Netflix reports subscriber growth but predicts slowdown
Is Winter Coming for Netflix?
The US streaming giant reported a record 9.6 million new subscribers in the first quarter of 2019 and also welcomed new competition to the market.A recent earnings report revealed the figures (comprised of 1.74 million in the US and 7.86 million internationally) and also how the company appeared quite bullish about the emergence of Apple and Disney’s rival streaming services, stating, "Both companies are world class consumer brands and we’re excited to compete."
Netflix's total subscriber base is nearly 149 million but the company asserts that, in terms of streaming hours, they still only make up about 10% of total TV usage, perhaps suggesting that it will be live TV that takes the greatest hit from Apple and Disney.
The company stated, “We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on demand entertainment is so massive and because of the differing nature of our content offerings.”
But that’s not the whole story and the company reappraised their post Q1 forecasts in response to investor nerves about price hikes and competition, warning that Q2 may only see growth of an additional 5 million subscribers. This falloff has been ascribed to a short term ‘churn effect’ as the latest price increases take effect across the United States, Brazil, Mexico and parts of Europe and is ‘not unexpected.’
Netflix’s apparent confidence in shaking off the impending competition may come from a raft of upcoming content due to hit its service in the coming months. This includes new seasons of Stranger Things, 13 Reasons Why, Orange is the New Black, The Crown and La Casa de Papel (aka Money Heist) as well as high profile films like Michael Bay’s Six Underground and Martin Scorsese’s The Irishman.
Netflix assured its shareholders that it will continue to build its subscriber levels and, it seems that with such a huge base already in place, its headstart will bode well, whereas Apple and Disney will both have to gain subscribers from a standing start. Meanwhile, Netflix continues to pump billions into content creation as net income in the first three months of 2019 climbed to $344 million and total revenue rose from $3.7 billion to $4.52 billion.
In addition, the company announced that it will run a trial on its UK service by releasing weekly top 10 lists of the most popular content across various categories - everyone loves a list! Depending upon audience reaction, this is then expected to roll out to the other territories.
The real test is to come later in the year when Apple's TV+ launches with its raft of new material from the likes of Steven Spielberg and Oprah Winfrey and Disney+ unleashes its established stable of Pixar, Marvel and Star Wars content - all viewer favourites - at half the price of a Netflix subscription.
Source: www.flatpanelshd.com, www.broadbandtvnews.com, www.reuters.com
Image Source: hbr.org
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