{"id":294114,"date":"2019-01-18T07:37:16","date_gmt":"2019-01-18T05:37:16","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=294114"},"modified":"2019-01-18T07:37:16","modified_gmt":"2019-01-18T05:37:16","slug":"netflix-market-share","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/294114\/netflix-market-share\/","title":{"rendered":"Netflix market share"},"content":{"rendered":"
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Netflix Inc\u2019s \u201cBird Box,\u201d \u201cYou\u201d and other new programs helped attract millions more subscribers to the streaming service last quarter. But slower sales growth disappointed investors riding high on a 50% stock gain in recent weeks.<\/p>\n

Though revenue grew 27% to $4.19 billion in the fourth quarter, that came up short of the $4.21 billion projected by Wall Street. The forecast for current-quarter sales also missed estimates, sending the shares down as much as 5.3% in late trading.<\/p>\n

The results suggest that Netflix\u2019s unprecedented spending spree on new movies and shows may not pay off as quickly as expected – despite the buzz for hugely popular hits like the horror movie \u201cBird Box,\u201d which was seen by 80 million subscribers.<\/p>\n

The online entertainment company said Thursday that paid memberships increased by 8.84 million in the fourth quarter, beating its own forecast made in October.<\/p>\n

It predicted a record 8.9 million new customers worldwide in the current first quarter, but that\u2019s up only slightly from the period just ended.<\/p>\n

\u201cManagement is taking a cautious tone,\u201d said Geetha Ranganathan, an analyst at Bloomberg Intelligence. The light subscriber forecast for the current quarter is partly the result of the price increase Netflix announced Tuesday.<\/p>\n

\u201cThe long-term investment story remains intact given overseas additions are projected to rise 22%,\u201d she said.<\/p>\n

\"\"<\/a><\/p>\n

Cash Flow<\/h3>\n

Netflix is racing to keep its huge lead in an increasingly crowded field of streaming services, with competitive offerings coming from Walt Disney Co. and AT&T Inc.\u2019s WarnerMedia later this year. The company\u2019s long-term programming budget stood at $19.3 billion at year end, up from $18.6 billion three months earlier.<\/p>\n

\u201cThere\u2019s a billion hours of television content being consumed today – we\u2019re winning about 10% of it,\u201d chief executive officer Reed Hastings said in an online Q&A.<\/strong><\/p>\n

\u201cWe don\u2019t get so focused on any one competitor and really think our best way is to win more time by having the best experiences.\u201d<\/p>\n

Netflix\u2019s operating margin shrank in the quarter, because of the heavy load of titles released. In addition to \u201cBird Box,\u201d 40 million households watched a series called \u201cYou,\u201d about a stalker. The top unscripted show was the much-talked-about program on housecleaning called \u201cTidying Up with Marie Kondo.\u201d<\/p>\n

The company also called out the successes of content overseas from Turkey and the UK.<\/p>\n

For this year, Netflix expects negative cash flow of about $3 billion, in line with 2018. The losses will start to shrink thereafter, the company said.<\/p>\n

The slower-than-expected growth will put more of the spotlight on a recent price increase. The Los Gatos, California-based company said this week it was hiking its rates by $1 to $2 a month in the US.<\/p>\n

Still, most of Netflix\u2019s growth is coming from overseas. The company believes that international markets will one day account for as much as 90% of its customer base. The company signed 7.31 million new paid customers outside the US in the fourth quarter, or about 83% of all new subscribers.<\/p>\n

Netflix\u2019s investment in original content starting six years ago was a bet that studios and networks would eventually look to do their own streaming, said Ted Sarandos, chief content officer. The service still has plenty of second-run programs, he said, but the momentum has shifted toward its original fare.<\/p>\n

\u201cWe have shows like \u2018Grey\u2019s Anatomy\u2019 or \u2018Friends,\u2019\u201d he said.<\/p>\n

\u201cBut if you stack all of the viewing – like Top 50 or Top 25 most watched shows, by seasons, or by series – it\u2019s dominated primarily by our original content brands.\u201d<\/p>\n

Profit for the fourth quarter came to 30 cents a share, beating the 24-cent average of analysts\u2019 estimate. This quarter, the company is predicting earnings of 56 cents, short of the 85-cent average Wall Street forecast. The company said sales will be $4.49 billion, compared with analysts\u2019 projections of $4.6 billion.<\/p>\n

Despite the shaky stock reaction, Raymond James analyst Justin Patterson sees more positives than negatives.<\/p>\n

\u201cOverall, 2019\u2019s off to a positive start,\u201d he said in a note.<\/p>\n

\"\"<\/a><\/p>\n

\n

Read: Netflix\u2019s competitive edge<\/a><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Netflix Inc\u2019s \u201cBird Box,\u201d \u201cYou\u201d and other new programs helped attract millions more subscribers to the streaming service last quarter. But slower sales growth disappointed investors riding high on a 50% stock gain in recent weeks.<\/p>\n","protected":false},"author":59,"featured_media":282896,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[26,263],"class_list":["post-294114","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-headline","tag-netflix"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/294114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=294114"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/294114\/revisions"}],"predecessor-version":[{"id":294126,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/294114\/revisions\/294126"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/282896"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=294114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=294114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=294114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}