The paid subscribers for Netflix have been relatively stagnant. Netflix’s attempt to attract more subscribers through new original series does not go as well as planned. The entertainment streaming platform will need to compete with another unexpected rival: sports broadcasts platform.
Netflix misses subscribers target, stock at risk
Netflix has started to falter from its fame wave. Quoted from Reuters, Netflix recorded an additional 2.2 million paid subscribers as of last September. Despite the immense incline, the number fails to exceed Wall Street’s and the company’s forecasted target of 3.4 million. In comparison, the accumulated number of Netflix paid subscriber from its peak from January through March is 15,8 million.
In addition, Netflix’s also underperformed with $1.74 of earnings per share from IBES’ prediction at $2.14. Accordingly, Netflix’s shares slipped 6% to $494 in Tuesday’s after-hours trading.
As noted from Reuters, eMarketer’s analyst Ross Benes commented that Netflix’s “domestic subscribers were nearly flat, which highlights Netflix’s saturation in the U.S.”. Thus, revenue growth will most probably come from price increases.
Nevertheless, Netflix’s gain in the first nine months of 2020 is still remarkable to note. With 195.2 million global streaming quarters recorded at the end of the third quarter, Netflix has exceeded its own record from the previous year. With it, Netflix scored a 22.7% higher revenue to $6.44 billion in the third quarter. The company also noted a rise in net income to $790 million, or $1.74 per share.
New original series still lose to major sports broadcasts
Netflix has continually released its original releases. Several titles put out in the third quarter are “Emily in Paris”, “Enola Holmes”, and “The Devil All the Time”. However, Netflix might need to prepare more to fight its strong competitors.
In Netflix’s official letter to its shareholders, the entertainment streaming platform mentioned that the “competition for consumers’ time and engagement remains vibrant”.
While Netflix has been rivalling with Walt Disney’s new launched Disney+ platform, it turns out Netflix still has more unexpected competitors. Major sports play have unexpectedly become Netflix’s strongest contender at the moment. With major sports resuming its play and providing streaming services, Netflix started to lose behind.
Upon its future plan, Netflix revealed to have over 150 productions on hand. The company expects to finish the production for all 150 titles by the end of the year. Netflix also aims to exceed the number of original titles released in 2020 as the company’s goal for 2021.
Read also: Netflix Shares Weakens Despite Growth in Subscribers
Follow and join us on Youtube, Instagram, Facebook, and Twitter to be part of the trader community in Asia
