Netflix sees 'modest headwind' created by new streaming rivals

Lawrence Kim
October 18, 2019

While Netflixs Q3 results were not a surprise, various media outlets have questioned whether Netflix could continue its reign as a top streaming provider as new services like Disney+ and Apple TV+ come online. "We're all relatively small compared to linear TV", Hastings noted on the company's third-quarter earnings call. Netflix is anticipating the loss of second run content as other streaming services pull content previously licensed to the streaming giant.

Worldwide paid net additions climbed 23% to 6.3 million in Q3, compared to 5.1 million in the year ago quarter and slightly above Netflix's anticipated 6.2 million. Simply 520,000 of these supporters had been pulled up within the USA, beneath the 800,000 that administration predicted.

USA online streaming giant Netflix Inc. said Wednesday that its revenue rose to 5.2 billion US dollars in the third quarter of 2019, up 31 percent year-on-year. The company reported mixed results, with an earnings beat and a miss on domestic subscriber adds, while revenue slightly missed analysts' expectations.

Forecasts for Q4 2019 are conservative, with Netflix predicting its USA revenue will grow 1.7% to US$2.455 billion and its global revenue will increase 5.7% to US$2.918 billion.

Netflix then cites The Crown, The Witcher and The Irishman in a list of reasons people will stick with the company. This week, Netflix revealed data for its most popular movies and shows over in its quarterly earnings report.

Netflix exclusive Stranger Things enjoyed mega-success, with a huge 64 million member households streaming the new third season in its first four weeks. The more conservative outlook amounted to a concession to the new entrants in the streaming market.

"The starting up of those sleek services and products might per chance be noisy. There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance", admitted Netflix, while setting out its stall in defence.

Earlier this year, Netflix raised the cost of its subscription plans for USA customers, a factor the company cited in its second quarter subscriber decline.

Apple is charging only $5 per month for its service, set for a November 1 debut, while Disney is selling a service featuring its vast library of treasured films and TV shows for just $7 per month beginning November 12. Netflix's most popular plan, a standard subscription, went up $2 to $12.99 a month.

“We strive to program Netflix with the best variety of high-quality content across many genres (scripted series, films, docs, comedy specials, unscripted TV, kids & family, anime, etc.).

Netflix is not concerned about the arrival of Disney+ and HBO Max.

That achievement, linked with issues about new rivals, had counted on Netflix shares, which had dropped 21 p.c from the final income account by way of common dealing and buying and selling on Wednesday.

As more competitors take aim at Netflix, some of them are also pulling their programming from the service. Specifically focusing on how the growth has been similar over the years in the two regions. "As that starts to happen, subscribers are going to start to notice, and some may start looking elsewhere".

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