Netflix earnings: Guidance causes stock to sink despite beat

Bessie Dean
April 17, 2019

The company's acquisition of Fox's assets has given it a majority stake in online streaming service Hulu, which is jointly controlled by Disney, AT&T's (T) WarnerMedia, and Comcast's (CMCSA) NBCUniversal.

The streaming video service now has almost 149 million subscribers worldwide and beat analysts expectations in its latest earnings report.

Global streaming giant Netflix has introduced a series of cheaper pricing plans for selected consumers in South Korea from this month, prompting questions over its pricing strategy applied differently depending on the region.

The cooler outlook comes as the company faces increasing pressure from rival streaming services that are being launched by Disney and Apple.

Netflix expects to add another 5 million subscribers during the current quarter ending June, but that projection fell well below analysts' forecast.

The company said the viewers would be able to watch its content on Disney+ after paying a subscription fee of Dollars 6.99 per month. Its often volatile share price dipped slightly after the news broke, falling close to 1%, as USA growth slowed. "We will be testing different options in select countries, where members can, for example, watch Netflix on their mobile device for a lower price and subscribe in shorter increments of time", Netflix said.

Disney has announced that its highly anticipated streaming service, which is set to take on the likes of Netflix and Amazon, would launch in the U.S. on November 12.

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Netflix's revenue climbed 22% to $4.5 billion.

Netflix does not release any country-specific numbers, although its been releasing originals series and films in India.

"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 in its letter to shareholders on Tuesday.

Disney said it would include all 30 seasons of "The Simpsons", family-friendly titles like "The Sound of Music,"and "Malcolm in the Middle" and its forthcoming "space opera " series "The Mandalorian". But as we gleaned from the company's overhyped presentation last month, Apple had little to show us beyond those famous faces.

His reaction, however, isn't as revealing as you might think. It'll cost $6.99 a month - or half of what Netflix charges for its standard plan. "But that doesn't necessarily mean that subscribers will cancel Netflix". The aggressive spending has led to a tripling of the company's debt in two years, to $10.36 billion in 2018, from $3.36 billion in 2016. The company is working on projects with some of the biggest names in Hollywood, including Oprah Winfrey, Reese Witherspoon and Steven Spielberg.

Apple has not yet said how much its service will cost or when exactly it will launch.

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