Netflix now has 53 million subscribers worldwide, but has missed its forecast for membership growth, causing the firm’s stock price to take a 26 per cent hit.
The streaming giant had expected to add 1.33 million subscribers domestically, but only attracted 980,000 new sign-ups. In its international territories it had predicted 2.36m new users, but the actual figure was 2.04 million.
Netflix’s stalling growth has been widely attributed to a $1 price rise to $8.99 a month. International prices have also been raised. It could also be a sign that its huge investment in original programming like Orange is the New Black and House Of Cards is not resonating with potential customers as much as Netflix had hoped.
The company wrote: “For the prior three quarters, we under-forecasted membership growth. This quarter we over-forecasted membership growth.
“We’ll continue to give you our internal forecast for the current quarter, and it will be high some of the time and low other times.”
Yet another thing on the firm’s radar on Wednesday, is HBO’s decision to launch a standalone streaming service in 2015, which will not require subscribers to have a cable TV subscription.
Netflix’s Reed Hastings said the decision from its ‘primary long term contender’ was ‘inevitable and sensible,’ claiming there was room in the online streaming market for both services to prosper.
He wrote: “Starting back in 2011 we started saying that HBO would be our primary long-term competitor, particularly for content. The competition will drive us both to be better.
“It was inevitable and sensible that they would eventually offer their service as a standalone application. Many people will subscribe to both Netflix and HBO since we have different shows, so we think it is likely we both prosper as consumers move to Internet TV.”
In better news for Netflix is announced all 10 series of classic sitcom Friends will arrive on the on-demand platform in January (US and Canada only). Perhaps that'll get subscriber growth out of second gear?
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