Hastings brushed off the disappointing second quarter as an aberration and predicted Netflix's subscriber growth this year will surpass the 28.6 million customers who were added last year. In the most recent quarter, Netflix earned almost $271 million, a 30% drop from the same time previous year. The streaming service reported that it added just 2.7 million paid subscribers worldwide during the period, missing analysts' expectations calling for 4.8 million subscribers.
The company is projecting a stronger forecast for the third quarter, with an estimated 7 million global paid net addition of members, while its revenue guidance was set for 5.25 billion dollars. While season 3 dropped on July 4th, and therefore during the height of the summer, a new theory put forth by ScreenRant suggests that Stranger Things season 4 may not be with us until the latter stages of 2020.
Group M analyst Brian Weiser said that for now, other services shouldn't be overly concerned by a weak quarter or two at Netflix. And Q3 kicked off with Stranger Things season three, which drew 26.4 million unique viewers in its first four days in the U.S.
The Q2 content which Netflix did find worth mentioning includes Dead to Me starring Christina Applegate, watched by 30 million households in its first month, and which has been renewed for a second season. It also mentioned the mobile game based on the hit series announced at E3, along with a new title based on its upcoming Dark Crystal: Age of Resistance and a partnership with Epic Games. Europe, Latin America and Asia have been the primary drivers of Netflix's customer acquisition in recent years, and growth must be sustained if the company is to justify its high valuation. He quipped that many Netflix employees are fans of HBO shows.
Shares in Netflix skidded 11.97 percent to $319.07 in after-market trade following the results, which showed revenues and profits largely in line with analyst forecasts.
Netflix has staked its future on global expansion and creating original TV shows, movies and documentaries to attract new customers and keep the existing ones paying monthly subscription fees.
By contrast, the Basic plan price in the U.S.is $8.99 per month.
"The problem is that with intensifying competition, there is no guarantee Netflix has the pricing power needed to raise prices without massively bleeding users".
The company, behind such hits at The Crown and Orange is the New Black, said in its statement: "We don't believe competition was a factor since there wasn't a material change in the competitive landscape during [the second quarter] and competitive intensity and our penetration is varied across regions", the company said. And some are even pulling the shows they licensed to Netflix to use on their own streamer.
The company added that it will differentiate itself from some of the newcomers in that it has no plans to introduce ads.
Obviously, Netflix plans in the USA allow you to stream content directly to your phone, but there is no phone-only plan.