[ad_1]
Netflix surprised Wall Street by attracting fewer subscribers than expected last quarter, renewing fears that the video streaming service has become an investment bubble.
Shares plummeted 15% after Netflix added 5.2 million users. period, about a million less than expected. Its forecast for the current quarter also reflects a deceleration: the largest online pay-TV network in the world plans to add 5 million customers, a slower pace than a year earlier.
Shareholders and analysts are now tasked with determining whether the blip slowdown or a longer-term problem. Netflix shares have more than doubled this year as investors bet that the company will add tens of millions of customers worldwide for years to come.
Along the way, Wall Street could focus more on the story of Netflix Rob Arnott, head of the fund research firm Research Affiliates
"They're considered a bubble", did he said on Bloomberg Television
. Netflix executives have expressed little concern over a call with analysts and investors, insisting that their growth over the last 12 months has still exceeded expectations. Netflix fell short of its predictions a few years ago, a shortfall attributable to the time to the transition to smart credit cards
'Netflix & # 39; wants to build an entertainment empire on the Disney scale
"said Reed Hastings, general manager of the company.
One of the reasons for this lack may be a lack of content. Netflix released a slender list of shows during the quarter, compared to its typical production. He has not added additional seasons of his greatest hits, such as "Stranger Things," nor has a new show become a phenomenon. Since Netflix released "House of Cards" in 2013, the company has credited new seasons of original series with luring customers.
Netfllix released a new season of "13 Reasons Why" and the Marvel series "Luke Cage", a new comedy on the theme "Nanette" by Hannah Gadsby
. Potential new customers may have also been distracted by the World Cup, a quadrennial football tournament that is one of the most watched TV events in the world. 19659002] Investors value Netflix at a much higher level than other media companies of similar size because of this potential for future growth. Its market valuation surpassed that of Walt Disney this year, although it reported less than a quarter of the turnover.
Netflix's second-quarter revenue was also lower than expected. It posted 3.91 billion US dollars, against an average estimate of 3.94 billion US dollars. But California's Los Gatos is taking an important step: international customers represent a larger business than domestic consumers.
Once a service for English speakers, Netflix has increased its investment in programs filmed in other languages. During this quarter, the company launched its first Danish and Indian dramas, and plans to launch a new foreign language program at least once a week next year.
Profit was positive in the last quarter, but not enough reassuring investors. Earnings amounted to 85 cents per share, exceeding the estimate of 79 cents analysts.
"We had a strong but not exceptional quarter," the company wrote in a letter to shareholders
. Movie theaters
The production and promotion of a library of shows for a global audience have been expensive. Netflix has borrowed money repeatedly to pay for its programming and plans to spend between $ 3 and $ 4 billion more than in 2018. Marketing spend exceeded $ 500 million in the quarter , nearly double the amount spent The increase in Netflix has pushed other technology and entertainment companies to invest more in online video services. Disney is selling an Internet version of its ESPN sports network and plans to introduce a general entertainment video service next year. Apple, meanwhile, spends more than 1 billion US dollars on original programming.
Netflix said Monday that it expects more competition, but has ruled out any potential negative impact on its business. "Our strategy is simply to continue to improve, as we do every year," the company said.
Arnott, Research Affiliates, expects the Netflix rout to have a large impact on clues. He had been the second-biggest winner on the S & P500 this year.
[ad_2]
Source link
