Netflix, the streaming platform has only registered 2.7 million new paid subscriptions between April and June 2019, where it expected five million, and it even lost in the United States.
Online video giant Netflix suffered an unexpected setback in the second quarter, attracting far fewer new subscribers than expected, just as the competition intensified.
The sanction was immediate on Wall Street where the stock was down more than 12% in electronic trading after the close of the stock market.
151.56 million customers worldwide
Netflix has not only registered 2.7 million new paid subscriptions between April and June, where it was expecting 5 million, but it even lost in the United States.
The group, which now has 151.56 million customers, refuses to attribute this underperformance to competition, which it says has “not changed much” during the period.
It is however intense on the sector with the offers of Amazon, Hulu, the BBC, YouTube or Hotstar in India. And it should further intensify in the coming months with the arrival on the market of Disney, Apple, WarnerMedia or NBC Universal.
Netflix already knows it will lose flagship series like “Friends” or “The Office”, still watched by many fans.
“War of streaming”
But the Californian group says it sees an advantage: it should allow it to release funding to create even more original content.
And if you consider that 700 million households, not counting China, pay for TV subscriptions, the cake is big, said Reed Hastings, the boss of Netflix, in an interview broadcast on the internet. Especially since the spectators “subscribe to different services”.
“The more we talk about the “streaming war”, the more it catches the eye and suddenly consumers are turning faster from conventional TV to streaming TV”
To explain the slowdown in the second quarter, Netflix especially advance that the new content did not seduce as much as expected despite the success of some nuggets like the series ” Dead to Me “, documentaries on nature and animals narrated by the British David Attenborough ” Our Planet “, or the movie ” Murder Mystery ” with Jennifer Aniston and Adam Sandler.
He also pointed out that it was difficult to reiterate the success of the beginning of the year when the group attracted 9.6 million new subscribers.
And he recognizes that the recent rise in subscription prices in some countries has cooled some.
Martin Scorsese exclusive
“It’s going to be difficult for Netflix with the arrival of new competitors and the removal of popular content, but the addition of solid content in the third quarter is expected to recover some subscribers,” said analyst Eric Haggstrom eMarketer firm.
Netflix is hoping to get off to a good start and anticipates a total of 7 million new subscribers by the end of September, including 800,000 in the US and 6.1 million in the rest of the world, thanks to the launch of the new Stranger Things seasons. “,” Casa de Papel “,” The Crown “or the last season of” Orange is the new black “.
The Californian company also relies on the exclusive launch of the film of multi-Oscar-winning director Martin Scorsese, “The Irishman”, and the action film “6 Underground” directed by blockbuster specialist Michael Bay.
To keep viewers around his creations, Netflix is also betting on related partnerships, such as the launch of new video games based on the series “Stranger Things” and “Dark Crystal: The time of resistance”.
And to capture the vast Indian market, Netflix will launch a bid for mobile devices less than 4 dollars.
On the financial side, the streaming giant saw its quarterly net profit fall by 29%, to 271 million dollars. Reported by share – the benchmark in North America – the profit came out at 60 cents, slightly above expectations.
At 4.92 billion dollars, the turnover is slightly lower than market expectations (4.93 billion).