Industry analysts pointed to increase in competition in video streaming as the reason for the slowdown, with Amazon’s Prime Video service, Sky’s Now TV, and the range of on-demand and online store all fighting with Netflix for market share. Amazon now doesn’t charge extra for 4K videos, including those with high dynamic range (HDR) technology.
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Netflix memberships grew a record high 6.74 million in the quarter, hitting 81.5 million worldwide, with some 42 per cent of those outside the United States, the company reported.
It’s no secret that Amazon.com has had its sights set on Netflix and its subscribers for years. “But as Amazon spends more money on streaming video, it’s possible that the e-commerce giant’s invigorated efforts could pressure Netflix over the long haul”. The new monthly subscription goes up against its direct competitors, Netflix’s US$9.99 and Hulu’s ad-free US$11.99.
While Netflix characterized the forecast as “in line” with previous years – it added 900,000 subscribers in the USA during the same period last year- the news sent shares down more than 10 percent in after-hours trading.
In its latest financial guidance statement, Netflix says its established markets around the world are all growing. “We’ve got these large blooms of launches last year and in Q1 this year”, he said. “We are seeing growth in the overall Internet TV market that is displacing linear TV, so it’s natural that everybody is coming in as they realize that the future is Internet TV”. However, the increase in number is found out to be below the same period a year ago when Netflix added 2.28 million subscribers more.
The huge launch in January saw Netflix become available in almost every country in the world except for China, but the letter says the company has no clear plans in breaking into that market just yet. “We find the conclusion hard to escape”, he said.
Investors didn’t like what they saw though, with shares falling by more than 15% before steadying at a 10% drop. “Given that such a huge percentage of the population uses Netflix, if they were all forced to stop using VPNs to access the shows they want, that would represent a major setback for privacy”, said Open Media communications director David Christopher.
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HBO, however, still has a huge advantage over Netflix in terms of prestige.
