Netflix added subscribers like gangbusters but it won't book as many next time
Netflix warns about slowing member growth, expecting to add roughly half as many members in the second quarter as it did in the first.
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Netflix's Triple Frontier, an action flick starring Ben Affleck, was streamed by 52 million accounts in the first month.
Netflix's latest report on its business had a twist ending this time: The streaming-video giant still is adding customers like crazy, but it doesn't expect its growth to keep pace in the coming months
US subscribers grew by 1.74 million and its members abroad climbed by 7.86 million, Netflix said in a report Tuesday on its first-quarter financial performance. But the company predicted the current quarter's subscriber ranks would increase by just 5 million people, roughly half of the 9.6 total members it added in the first three months of the year.
Netflix also touted the viewership of some of its originals. Heist movie Triple Frontier, starring Ben Affleck, was watched by more than 52 million households in its first four weeks. Umbrella Academy, a superhero drama based on a comic book by Gabriel Bá, has been watched by 45 million subscribers in its first four weeks, the company said.
Netflix's cautious outlook comes days after entertainment giant Disney unveiled its Netflix rival, Disney Plus. Launching in the US later this year for $7 a month, Disney Plus will mark the company's aggressive move onto Netflix's streaming turf. Given the eye-popping catalog of shows and movies Disney plans to put on its streaming service, it's easy to lose sight of how dominant Netflix is likely to stay. Compared with Netflix's total subscribers, which surpassed 148 million per Tuesday's report, Disney's most optimistic projection for its growth five years after launching will still be shy of 100 million Disney Plus members.
In a letter to shareholders, Netflix said it was in the middle of its price hikes in the US, Brazil, Mexico and some parts of Europe, which created "some modest short-term churn" -- jargon for people quitting.
But it downplayed the threat of new competitors like Apple and Disney rolling out streaming services. The company called them "world class consumer brands" but indicated their presence wouldn't impact Netflix's growth.
"We don't anticipate that these new entrants will materially affect our growth because the transition from linear to on demand entertainment is so massive and because of the differing nature of our content offerings," Netflix wrote. "We believe we'll all continue to grow as we each invest more in content and improve our service and as consumers continue to migrate away from linear viewing."
Netflix noted that its streaming video represents about 10% of viewing hours on televisions in the US.
In its results, international subscriber base grew by 7.86 million members to 88.63 million, beating the 7.3 million additions the company predicted. In the US, Netflix added 1.74 million streaming customer, for a total of 60.23 million, surpassing its 1.6 million guidance.
In the second quarter, Netflix expects to add only 300,000 streaming members in the US and 4.7 million new members internationally. Netflix predicts 55 cents per share in earnings for the period, while on average, Wall Street analysts who track Netflix expect 99 cents.
Overall for the first quarter, Netflix reported a profit of $344 million, or 76 cents a share, compared with $290.1 million, or 64 cents a share, a year earlier. Revenue rose 22 percent to $4.52 billion.
Analysts on average expected per-share profit of 57 cents -- a penny more than Netflix's guidance -- and $4.5 billion in revenue.