Potential new customers may have also been distracted by the World Cup, a quadrennial soccer tournament that is among the most-watched TV events in the world.<\/p>\n
Investors value Netflix at a far higher level than other media companies of similar size because of that potential for future growth. Its market valuation surpassed that of Walt Disney Co. this year, despite reporting less than a quarter of the revenue.<\/p>\n
Netflix\u2019s second-quarter revenue also came in short of projections. It posted $3.91 billion, compared with an average estimate of $3.94 billion. But the Los Gatos, California-based company hit a milestone: International customers accounted for a bigger piece of sales than domestic users.<\/p>\n
Once primarily a service for English speakers, Netflix has ramped up its investment in shows filmed in other languages. The company debuted its first Danish and first Indian dramas in the quarter, and it plans to release a new foreign-language program at least once a week next year.<\/p>\n
Profit was a bright spot in the latest quarter, but not by enough to reassure investors. Earnings amounted to 85 cents a share, topping the 79-cent estimate of analysts.<\/p>\n
\u201cWe had a strong but not stellar quarter,\u2019\u2019 the company wrote in a letter to shareholders.<\/p>\n
Spending Spree<\/strong><\/p>\n Producing and promoting a library of shows for a global audience has come at a high cost. Netflix has borrowed money repeatedly to pay for its programming, and expects to spend between $3 billion and $4 billion more in cash than it will generate in 2018. Marketing expenses surpassed $500 million in the quarter, nearly double the amount spent a year ago.<\/p>\n Netflix\u2019s rise has pushed other technology and entertainment companies to invest more in online video services. Disney is selling an internet version of its sports network ESPN and plans to introduce a general entertainment video service next year. Apple Inc., meanwhile, is spending more than $1 billion on original programming.<\/p>\n Netflix said Monday that it expects more competition, but dismissed any potential negative impact on its business. \u201cOur strategy is to simply keep improving, as we\u2019ve been doing every year,\u2019\u2019 the company said.<\/p>\n Research Affiliates\u2019 Arnott expects the Netflix rout to have a broad impact on indexes. It had been the second-biggest gainer on the S&P 500 so far this year.<\/p>\n \u201cThere\u2019s a distinct risk of a ripple effect,\u201d Arnott said.<\/p>\n
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