Netflix suffered a shock share price dive last night after missing subscriber growth targets for the first time in more than a year.
Shares in the internet streaming giant plunged by around 13pc in after-hours trading in the US as it added 5.15m subscribers in the past three months – a million less than forecast.
Netflix added 670,000 subscribers in the US in the second quarter, well below analysts’ estimates of 1.19m, while signing up 4.47m internationally, compared with 4.97m expected. It now has 130m subscribers.
Analysts had raised concerns that Netflix would struggle to maintain its rapid growth.
Last year Netflix added 24m subscribers globally, boosted by original content such as The Crown, Stranger Things (pictured), Ozark and House Of Cards
Eric Schiffer, chief executive of private equity firm Patriarch, said: ‘Investors are devastated by Netflix’s Q2 projection that went down in dramatic flames. Now future projections are suspect and that decimates valuation.’
Netflix admitted its performance during the quarter was ‘strong but not stellar’, adding it overestimated forecasts.
The surprise results come amid a battle looming between Netflix and Disney, which is preparing to launch its own rival streaming service featuring content it owns.
That is expected to include blockbuster franchises such as Star Wars and Marvel superheroes, as well as the Pixar animated films.
In a letter to shareholders yesterday, Netflix said it expected an onslaught of competition from the AT&T and Time Warner merger and the planned Fox tie-up with Disney or Comcast.
‘There has never been a better time to be a creator or consumer of content,’ it said. ‘Our strategy is to simply keep improving, as we’ve been doing every year.’
Revenues just about met expectations, growing 40.3 per cent to £3billion ($3.9billion) during the period, while profits jumped to £290.3million from £49.9million a year earlier.
Bosses are reportedly looking towards the massive Indian market in a bid to boost subscribers by a further 100m.
That has seen it debut new shows such as Sacred Games, a thriller about the criminal underbelly of Mumbai.
Last year it added 24m subscribers globally, boosted by original content such as The Crown, Stranger Things (pictured), Ozark and House Of Cards.
Paid-for on-demand video services accounted for almost a fifth of television viewing in the UK in 2017, research by the Broadcasters’ Audience Research Board found.
Some 8.2m households were estimated to have a Netflix subscription.
Last night Netflix said it expects to add another 5m subscribers over the next three months.