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Netflix Misses Big on Q2 Subscriber Growth, Stock Drops 11 Percent

Netflix Misses Big on Q2 Subscriber Growth, Stock Drops 11 Percent

Netflix shares dropped 14.11 per cent to US$343.97 in after-market trade, in a setback to the television juggernaut operating in some 190 markets around the world.

Almost $23 billion was wiped off the value of Netflix last night after it missed subscriber growth and revenue forecasts for the second quarter.

During the second quarter, global net adds totaled 5.15 million.

Netflix said it made a profit of $384m on revenue of $3.9 billion in the recent quarter, compared to net income of $66m on $2.8 billion in revenue the same time previous year.

With all this, the stock is tanking.

On Wall Street, the slowdown is raising questions about whether Netflix can sustain the rapid-fire growth that has made it one of the hottest companies in tech, especially as bigger players crowd its turf.

Although Netflix fell short with subscribers, its shows remain critical hits.

With more than 56 million domestic subscribers, or about 1 out of every 6 people in the States with an account, Netflix had already been heading towards a saturation point at home.

French ace wins World Cup Young Player award
It was a sharp climb down from the ante Croatia had set having taken the game by the scruff of its neck from kick off. The World Cup final itself is a big achievement for them, an incredible feeling that the entire country will cherish.

All told, Netflix now boasts upwards of 130 million subscribers across the globe. Its total base of 57 million subscribers in the USA dwarfs Hulu's 20 million users and HBO's 5 million.

Revenue: $3.91 billion. Analysts were expecting $3.94 billion.

"Netflix is in a business that varies by quarter anyway and perhaps the company shouldn't have gotten too enamored with the insane success of the last two quarters, which was invigorating but not sustainable", Forrester analyst James McQuivey said. Revenue climbed 6 percent to $3.9 billion.

Netflix will spend as much as $8 billion producing and acquiring TV shows and movies this year, including Disenchantment from The Simpsons and Futurama creator Matt Groening, new seasons of House of Cards and Making a Murderer, and presumably several series and films yet to be announced.

The Silicon Valley-based company noted that it is beginning to "lead artistically" in some categories with its original content, earning enough Emmy nominations this year to break a 17-year top-spot streak by HBO.

Disney is also planning its own streaming service, which is expected to launch in 2019.

"Right now, Netflix is still miles ahead of its closest competitor, but there is going to be a giant bulls-eye on Netflix's back during the next 18 to 24 months", Ives predicted in an interview.

"Our strategy is to simply keep improving", the company stated.

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