Netflix on the verge of hitting 100 million subscribers
- Author: Ronnie Bowen Apr 20, 2017,
Apr 20, 2017, 9:22
Along with posting strong earnings 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.
Netflix, which has been rapidly expanding globally as its business in the USA slows, predicted that profit will drop in the second quarter as the company spends more on new series and movies.
Sequentially U.S. subscription additions of 1.42 million was far below fourth-quarter additions of 1.93 million and even further below additions of 2.23 million in the first quarter of previous year.
People were able to watch videos everywhere on their smartphones and tablets, said Michael Pachter Wedbush Securities analyst. However, Netflix clearly has faith in its on prowess.
In turn the number of net additions have fallen; Netflix now expects to have 8.15 million net adds, compared to 8.42 million net adds in the first half previous year.
Wall Street was expecting 5.27 million new subscribers. However, investors have been closely watching for signs of a slowdown in growth as the company reaches almost 100 million subscribers.
After global expansion of Amazon Video took place late a year ago, the company is beginning to open up the wallet to compete better with streaming rival Netflix. The company's progress toward reaching that goal has helped drive Netflix's stock price progressively higher during the past five years, a stretch that has seen the video service add 72 million more subscribers.
ReThink Technology Solutions estimates the current SVOD market in Europe to be ~$5.0 billion.
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However, for all its success, Netflix still has a ways to go before it catches up with HBO, the popular pay-TV channel that has served as its role model. All over the world, HBO has around 134 million subscribers and provides the internet-only option.
He said Netflix is also dealing with other competitive forced.
As of the end of March, Netflix had 98.75 million global streaming members.
Netflix is to spend over $1 billion on marketing this year as it looks to boost subscriber numbers.
Netflix missed slightly on subscriber estimates for its first quarter earnings report as the streaming giant saw shares initially dip but then rise more than 1 percent in after-hours trading on Monday.
The company said first-quarter profit more than quadrupled to $178 million, or 40 cents a share, compared with analysts' predictions of 37 cents.
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