On Monday, Netflix uploaded the company’s Q1 2017 Earnings Interview to its official YouTube channel. CEO Reed Hastings and other executives announced they had missed the total subscription projections for this quarter.
The streaming giant fell slightly short of its estimated goal of 5.2 million new subscribers for 2017’s first quarter, although it reported exceeding growth in net income and revenue levels year-over-year.
Netflix’s growth is starting to slow down, and it showed for a little while in trading after the announcement. The company is starting to feel the heat of the competition, particularly from direct contenders like Amazon and Hulu who are also expanding rapidly.
Netflix’s moves puzzle viewers and investors
While the company’s announcement was by no means financially worrisome, subscribers and investors apparently wonder if Netflix is making the right moves to keep growing.
Market analysts expected the streaming giant would hit the 100 million subscriber mark this quarter, and that the announcement would finally propel stock price upwards of $150 per share on after-hours trading. Some even suggested $160.
Instead, Hastings and his fellow executives reported 4.95 million new subscribers. 1.42 million of those users are new domestic sign-ups, while 3.7 million are watching from abroad.
At 45 million, international subscriptions are quickly catching up to U.S. numbers, which currently sit at 49 million after Monday’s reports. Naturally, there is more space to grow beyond national borders, so this was to be expected.
However, Netflix attributes the subscriber shortcomings to the slew of new content it is working on, which has also delayed the release of productions that used to debut in Q1, most notably season 5 of House of Cards.
The company has vowed to invest roughly $6 billion in original content this year alone, a commitment that initially worried investors but pleased fans. After learning some of the films were not particularly appealing, and judging by some of the new shows, viewers have also expressed their concerns.
People fear Netflix’s gamble on original content may not play out entirely as planned, particularly after some of the recent premieres failed to meet audience expectations. More than anything, they fear subscription fees may rise to compensate potential losses.
Does Netflix have a plan to stay on top?
For the streaming giant to keep growing, experts suggest Netflix must listen to its viewers and not be afraid of learning from its mistakes.
A lot of people may like Adam Sandler movies, sure, but audiences expect more exclusive content along the lines of Dave Chappelle and Louis C.K. comedy specials.
What’s more, the company has been widely criticized for making excellent quality shows but failing to promote them accordingly. To keep subscribers away from the bed and hooked to their screens, there must be effective marketing at play.
Still, Netflix has no plans on slowing down production of new content, and the premiere of big shows this quarter promises to surpass projections in every front. The platform is expected to reach 100 million users this weekend.