Moscow, 18 July — “Conduct. Economy” Netflix Shares fell more than 10% after the company reported that the number of subscribers for the quarter grew only by 2.83 million against the projected $ 4.8 million number of users of a streaming service in the United States in the first quarter of 2019 has decreased by 126 thousand was 60.1 million
Netflix Inc reported on Wednesday that for the first time in eight years lost us customers a streaming service and have not reached targets for new subscribers abroad.
Net profit fell to $270,7 million, or 60 cents a share, in the second quarter ended 30 June, compared with 85 cents a year earlier.
Total revenue rose to $4,92 billion from 3.91 billion, it is slightly below analysts ‘ expectations of $4.93 billion.
Shares of Netflix streaming service tumbled 11% to $of 323.2 per share after the company warned of a sharp decline in paid subscribers in the United States for the first time since 2011, 130 thousand, to 60.1 million people.
Simultaneously, Netflix has slowed down the increase of subscribers in other countries: their number grew by only 2.7 million — almost two times below the forecast of the company (5 million) result last year (5.5 million).
Netflix connects these results with the increase in subscription prices in the second quarter in some markets (the UK, Switzerland and some other countries of Western Europe, in the first quarter the service has increased the cost of the subscription in the U.S. and Latin America) and the fact that new launched in the second quarter of the TV shows and movies seemed to the audience not as attractive as expected.
Among other reasons — the content and competition with other streaming services from Apple, WarnerMedia, Walt Disney and Discovery. Netflix has already lost two iconic TV series — “the Office” and “Friends.” Both series will switch to competitor platforms Netflix.
The company first incurred losses in 2011, when Netflix decided to change the terms of subscription, the Wall Street Journal. Then the value of the company’s shares fell by 14%, writes Quartz, to $343. In this regard, the company has decided not to introduce a new subscription format.
“The business model of Netflix would require the company to scale-up. It spends billions of dollars on new content every quarter, but perhaps she ought to distribute funds and to expand the client base. The decline in the number of paid subscribers is detrimental to Netflix stock,” said analyst stock all hrgv Hargreaves Lansdown Nicholas Highett.
In July, Netflix released the third season of “Very strange case”, and in the first two weeks of the month, the company celebrated its customary growth rate of subscribers. The service predicts that by the end of July — September 2019 the number of paid subscribers will grow by 7 million — 0.8 million in the USA and 6.2 million abroad.
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