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Netflix is growing much more slowly

by Financial Economy

Netflix is growing much more slowly. After the subscription boom at the beginning of the corona crisis, Netflix is ​​now missing its own forecast. This is also likely to be due to new competitors such as Disney and HBO Max.

The rush of customers to Netflix is ​​collapsing: the bottom line is that Netflix only recorded 2.2 million new paid subscriptions in the third quarter and this result falls short of its own forecast of 2.5 million new customers. In the previous six months it was around 26 million. This means that the growth of the American streaming market leader is slowing down sharply after the subscription boom in the first half of the year. Investors let the share fall after the hours of trading by more than seven percent.

Netflix is ​​growing much more slowly

In the first half of the year, the increased demand due to the corona pandemic and series hits such as “Tiger King” caused a rush: 15.8 million new users were added in the first quarter and 10.1 million in the second. But now growth has slowed down sharply. This is also due to the intensified competition. In addition to established rivals such as Hulu and Amazon Prime, Hollywood giant Disney is now also relying fully on streaming. WarnerMedia’s HBO Max and Comcast’s Peacock also added other services.

Profit increases year-on-year by 19 percent

Compared to the same period last year, when 6.8 million customers were added, things looked much more modest in the past quarter. The profit rose year-on-year by 19 percent to 790 million dollars (668 million euros), but was also below Wall Street’s expectations. Meanwhile, sales rose by around 23 percent to 6.4 billion dollars and slightly exceeded forecasts. For the current quarter, Netflix expects 6.0 million new customers – here analysts had again expected more.

The management is well aware of the competitive pressure. “We are excited to compete against Disney and a growing number of other players,” said the letter to the shareholders confidently. But Netflix wants to improve its service as soon as possible in order to be “everyone’s first choice for online entertainment”. The competition includes not only streaming, but also other forms of entertainment such as video games or user-created content on YouTube and Tiktok.

Most of the new subscribers are from Asia

Netflix now has around 195 million subscribers. The development shows, however, that it is becoming more difficult for the company to win large numbers of new customers in the USA or in Europe: The majority of new subscribers come from Asia, especially Japan and South Korea. Netflix is ​​now betting on expanding further in India.

Netflix is growing much more slowly for source: https://www.spiegel.de/wirtschaft/unternehmen/netflix-waechst-deutlich-langsamer-a-e607e561-f702-48f0-9f7d-b3dced8acf2e

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Josephine 26 October 2020 - 00:24

i like netflix i thin super Netflix is growing much more slowly

paolo 26 October 2020 - 00:24

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