Netflix’s bet on new programming failing to take hold


Netflix Inc. shares slipped in late trading after fourth-quarter revenue came in below Wall Street estimates, a sign an explosion of new programming failed to hook enough viewers.

The streaming giant posted revenue of US$4.19 billion in the period, compared with a US$4.21 billion projection from analysts. Its forecast for the current quarter sales also fell short of estimates. It posted above-expected fourth-quarter profit of US$133.9 million, or 30 cents per share.

The results suggest that Netflix’s unprecedented spending spree on new shows may not pay off as quickly as expected. The company faces an increasingly crowded field in streaming services, with new offerings coming from Walt Disney Co. and AT&T Inc.’s WarnerMedia later this year. At the close of the third quarter, Netflix planned to spend US$8.4 billion on programming over the coming 12 months.

The slower-than-expected growth will put more of the spotlight on a recent price increase. The Los Gatos, Calif.-based company said this week it was hiking its rates by $1 to $2 a month in the U.S.

Still, most of Netflix’s growth is coming from overseas. The company believes that international markets will one day account for as much as 90 percent of its customer base.

Netflix fell as much as 5.6 per cent to US$333.37 in extended trading after the results were announced, before recovering somewhat. The stock had risen almost 50 per cent since hitting a recent low in December.

The horror film Bird Box, starring Sandra Bullock, began streaming in late December and was viewed by 45 million subscribers. Roma, from director Alfonso Cuaron, is in the mix for the best-picture Oscar, according to awards oddsmakers.

Read More

Be the first to comment on "Netflix’s bet on new programming failing to take hold"

Leave a comment

Your email address will not be published.


*