Netflix misses subscriber estimates, explains why it won’t ink live sports partnerships like Amazon’s NFL deal
Netflix missed slightly on subscriber estimates for its first quarter earnings report as the streaming giant saw shares initially dip but then rise more than 1 percent in after-hours trading on Monday.
Netflix added another 3.53 million subscribers internationally last quarter, along with 1.42 million in the U.S. Analysts expected 3.71 million net additions internationally and an additional 1.56 million customers in the U.S.
Netflix now has 98.75 million subscribers, up from 81.5 million last year.
The company also posted $2.64 billion in revenue — which met estimates and is up 34 percent from last year — and diluted earnings per share of $0.40, which beat estimates and is up from $0.06 last year.
Netflix expects to add 2.6 million subscribers internationally next quarter — it launched in 130 additional countries last year — and 600,000 subscribers in the U.S., both which exceed analyst estimates.
“The opportunity provided to us by the growth of the global internet is gigantic and our plan is to keep investing as we increase membership, revenue and operating margins,” Netflix CEO Reed Hastings wrote in the quarterly shareholders letter.
Hastings also briefly noted that Netflix has no plans to secure sports-related streaming rights deals like the one Amazon just inked with the NFL.
“Additionally, investors ask us about Amazon’s move into NFL football,” Hastings wrote. “That is not a strategy that we think is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows.”
Shares of Netflix are up more than 30 percent in the past year.
New data from comScore found that more than half of U.S. households connected to the internet watch video on at least one over-the-top service. Of the 49 million homes, Netflix reached 75 percent, YouTube was viewed in 53 percent of households, Amazon reached 33 percent, and Hulu trailed behind at 17 percent.
Netflix still maintains a clear lead in the streaming space, but competitors like YouTube and Amazon video are catching up to the streaming king. Amazon is expected to invest $4.5 billion in video content this year; Netflix said last year it expected to invest $6 billion in 2017.