Netflix missed on its subscriber projections in Q1 2017, adding 3.53 million subscribers vs 3.68 million estimated internationally.
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With competition heating up in the online streaming space, Netflix seems to have missed on its target of adding new subscribers in Q1 2017. The service has managed to add 4.95 million new subscribers as opposed to its forecast of 5.2 million subscribers globally. Breaking down this number further, the company added 1.42 million subscribers vs. 1.50 million estimated in the US and 3.53 million subscribers vs 3.68 million estimated internationally.
While analysts are blaming weak content on the platform for this quarter’s slow subscriber growth, Netflix remains confident that it will bounce back in Q2. In an earnings discussion, Netflix CEO Reed Hastings explained that the company has a “particularly full slate (of content) in Q2...which relative to Q1 is a little heavier.” “We are growing well on track in international, we are continuing to grow in the U.S., and quarter to quarter you will see some fluctuations,” he added.
Comparing its service to that of YouTube and Facebook, Hastings added that “it’s really just the beginning” for streaming and that the company sees the internet as a “phenomenal opportunity.” “We are not ad-supported, we are not as deep internationally as those companies, so we are just focusing on fantastic content, and just continuing to grow,” he said.
Hastings also hopes to achieve a landmark this coming weekend. Answering a question from analyst Doug Mitchelson of UBS, he said that the company expects its subscriber base to cross 100 million this weekend, admitting that the platform is “nowhere near as big as YouTube.”
According to what eMarketer senior analyst Paul Verna told CNBC, "It's fair to think that those competitors (Amazon, Hulu) are doing better and better...They largely figured out how to do the whole original series binge viewing thing that Netflix pioneered. Others have got very good at it.”
Another reason given by the company for slow subscriber growth is that one of its more popular original series, House of Cards, has been pushed for a Q2 release this year, as opposed to last year’s Q1 debut. While Netflix did add a bunch of original shows this quarter, most of them were first seasons. One of its biggest bets, Iron Fist, turned out to be lacklustre, while its more successful show, 13 Reasons Why, only debuted on the last day of Q1. In total, Netflix hopes to add 8.15 million new members in the first half of 2017.
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