Netflix shares fall as user growth stalls
Netflix shares fell by almost 11% in afterhours trading on Wall Street, over fears that the video streaming company’s growth is stalling.
Netflix forecast that it would add 500,000 members in the US this quarter and two million internationally. But the numbers were lower than analysts - who had anticipated 580,000 in the US and 3.5 million globally – were looking for.
The video streaming group, home to Orange is the New Black and House of Cards, posted a profit of $28 million (£19.6 million) for the period from January to March, up from $24 million in the same three months last year.
Netflix added 6.74m customers in the first quarter, with more than 4m coming from outside the US after its simultaneous January launch in 130 countries.
Globally, Netflix ended the first quarter with 81.5 million total subscribers and said it expects to break through 100 million subscribers during 2017.
One of the reasons for the slowing growth is that the company has been pushing up its charges. It is also facing tough competition from competitors Amazon, which unveiled a new monthly subscription pricing model yesterday, and Hulu.
Existing subscribers, who were initially exempt from the higher charge will see their membership bill rise to $9.99 a month during 2016, which may prompt churn amongst the subscriber base.
