“We are growing, but not as fast as we would like or have been,” admitted Netflix in its latest note to shareholders accompanying its quarterly financial results.
“Disrupting a big market can be bumpy.” The streaming video service announced that it now has 83 million subscribers, having added 1.7 million last quarter – below its forecast of 2.5 million, and considerably down from 3.3 million added in the same quarter in 2015. The reasons are interesting: Netflix recently raised its subscription prices, and admitted yesterday that “churn picked up slightly and unexpectedly”. Of course, subscriber numbers aren’t the full picture here: year-on-year, Netflix’s net profit rose from $26m to $41m, while its streaming revenues rose from $1.48bn to $1.97bn. Yet investors punished the company for falling short on anticipated subscriber numbers, sending its share price down by more than 15%.