Netflix subscriber growth slows, panicking Wall Street

Netflix plans to spend $8 billion on content next year the company has said. Disney spent $13.5 billion on content in fiscal 2017 about half of it on sports programming

That exceeded the 79 cents a share estimated by analysts polled by Factset.

Moving forward, Netflix forecasts a total revenue of US$3,988 million for Q3 18. This sent Netflix shares tumbling 12.6% (at time of this posting) in after-hours trading.

Commenting on the reaction of shareholders Eric Schiffer, chief executive of private equity firm Patriarch, said: "Investors are devastated by Netflix's Q2 projection that went down in dramatic flames".

The numbers missed Netflix's own forecast for 1.2 million and 5 million domestic and global subscriber additions, respectively.

While Wall Street remains overwhelmingly positive on Netflix and its role in video streaming globally, the numbers did raise question marks over future growth. Internationally, the company added 4.47 million subscribers, versus the 5.11 expected.

"These are still millions of new subscribers, even if they didn't meet the expectations that might have been set by the last two quarters, which were extraordinarily high", he said.

The Netflix logo is seen on their office in Hollywood, Los Angeles, California, U.S. July 16, 2018.

Last night it was revealed in NY, that Netflix added 5.2 million users in the second quarter, about a million fewer than the company predicted.

The streaming service that has ventured in recent years into original productions, such as The Crown, House of Cards and Stranger Things, reported a profit of $384.3 million, or 85 cents a share, up from 15 cents a share the previous year.

Ranganathan said Netflix pinned the shortfall on overaggressive earnings estimates in a "seasonally weaker [second quarter], partly aggravated by audience distraction from the World Cup". Revenue rose 5.6 percent, to $3.91 billion. Earlier this month, it debuted its first Indian original series, "Sacred Games", part of a slate of new shows aimed at the vast Bollywood entertainment market.

What is not clear is where the hurdles to that unbroken run of growth will come from, be it stronger competition from Amazon Prime or the changes in control of major film and TV franchises heralded by Walt Disney Co and Comcast Corp's bid for Twenty-First Century Fox Inc.

But it also faces growing competition.

At the same time, cable distributors are offering smaller and cheaper bundles of channels.

"Our strategy is to simply keep improving", Netflix said.

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