Netflix growth misses mark

Netflix plans to spend US$1 billion (S$1.4 billion) this year on marketing to attract subscribers.
Netflix plans to spend US$1 billion (S$1.4 billion) this year on marketing to attract subscribers. PHOTO: REUTERS

SAN FRANCISCO • Netflix subscriber growth missed its mark in the first quarter of this year, but the on-demand television star expects to hit the 100-million milestone this weekend.

Along with posting strong earnings on Monday, the United Statesbased company reported a net increase of 4.95 million subscribers, most of those overseas, where it has been investing to become a global entertainment network.

Netflix finished the first quarter with 98.75 million subscribers.

It had pushed back the next season of its hit House Of Cards and other programming to the second quarter, which could explain why it lured fewer new subscribers in the first quarter than expected.

But it will likely make it up from April to June.

Executives declined to reveal details about viewing trends, but chief executive Reed Hastings disclosed that people watch more than a billion hours worth of shows weekly.

He downplayed competition, saying "entertainment is not a zerosum game" and that it is more about winning fans with content.

Mr Hastings sees Netflix and rival Amazon Prime Video as competing more with people's limited viewing time than they are with each other.

Netflix plans to spend US$1 billion (S$1.4 billion) this year on marketing to attract subscribers. Both Amazon and Netflix have also been investing heavily in original programming to win subscribers to their on-demand video services.

Netflix reported profit of US$178 million on revenue of US$2.64 billion in the first three months of this year, compared with net income of US$28 million on revenue of US$1.96 billion in the same period a year earlier.

Up to Monday's close, the company's stock had risen nearly 19 per cent this year, outperforming the roughly 5 per cent gain in the broader S&P 500 index.

AGENCE FRANCE-PRESSE, REUTERS

A version of this article appeared in the print edition of The Straits Times on April 19, 2017, with the headline 'Netflix growth misses mark'. Print Edition | Subscribe