This March 19, 2018, file photo shows the Netflix app on an iPad in Baltimore. Netflix reports financial results Tuesday, April 16, 2019. (AP Photo/Patrick Semansky, File)

Netflix adds 9.6M subscribers in 1Q as competition heats up

Netflix expects to add another 5 million subscribers during the current quarter ending June

Netflix kicked off the year with the biggest subscriber gains in the history of its video-streaming service, but it still managed to disappoint investors by forecasting a springtime slowdown.

The strong first-quarter performance coincided with Netflix’s biggest U.S. price increases and emerging streaming challenges from Walt Disney and Apple, two of the world’s most popular brands.

READ MORE: Campaign calling for regulation of Facebook, Netflix launches in B.C.

The video service added 9.6 million subscribers worldwide during the first quarter of 2019, topping the projections of both Netflix’s own management and Wall Street analysts. It’s the most subscribers that Netflix has gained during any three-month stretch since the Los Gatos, California, company unveiled its streaming service 12 years ago.

The surge announced Tuesday left Netflix with nearly 149 million subscribers through March.

Netflix expects to add another 5 million subscribers during the current quarter ending June, but that projection fell well below analysts’ forecast. It would also represent a decline from the 5.9 million customers that the service picked up during the same period last year.

Netflix’s stock dipped 1% in extended trading to $355.85 after the numbers came out.

In a discussion streamed on video, Netflix CEO Reed Hastings likened the past quarter to a “perfect clean shot” down the middle of a golf course’s fairway while drawing comparisons to Tiger Woods’ victory in the Masters tournament.

Netflix tested the bounds of its popularity with a recent a recent price hike that raised the cost of its most popular plan to $13 a month, a $2 increase. New U.S. subscribers had to start paying the higher price in January, but it only recently started to hit existing customers.

The company said it doesn’t expect the price increase to trigger significant cancellations, though its second-quarter forecast implies otherwise. It expects to add just 300,000 U.S. subscribers from April through June, down from 700,000 at the same time last year.

Competition facing Netflix will heat up toward the end of this year when both Disney and Apple plan to start selling their own video-streaming services backed by big budgets.

Disney’s offering, due out in November, could be a bigger threat because it will feature a library of classic films supplemented with original programming cooked up by a company with a proven record of churning out crowd-pleasing entertainment. What’s more, the service — called Disney Plus — initially will cost just $7 per month.

Apple hasn’t disclosed the pricing of its service, which will include programs featuring renowned stars such as Oprah Winfrey, Jennifer Anniston and Jason Momoa, nor a specific date for its debut.

“There’s a ton of competition out there, and Disney and Apple add a little bit more but frankly, I doubt it will be material,” Hastings said.

Besides the good news on subscribers, Netflix’s first-quarter profit of $344 million rose 19% from the same time last year; it included a $58 million gain from currency adjustments. The company earned 76 cents per share during the first quarter, 18 cents above the estimate among analysts polled by FactSet.

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

But the company continues to spend more cash than it is bringing in as it pours money into a lineup of TV series and films that has been attracting more subscribers. The company burned through another $460 million in the quarter and expects its negative cash flow this year to exceed last year’s total of a negative $3.5 billion.

Michael Liedtke, The Associated Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Haida Gwaii, Prince Rupert and Port Hardy brace for heavy winds

Gusts ready to hit the communities at 120 km/h as Wednesday evening falls

Coastal GasLink stresses pipeline ‘on a schedule’ as B.C. appoints liaison for Wet’suwet’en

670-kilometre pipeline is schedule to be completed by end of 2023

Anticipated adverse weather leads to ferry rescheduling, Prince Rupert and Haida Gwaii

Sailing for the Northern Expedition, Skidegate has been revised by BC Ferries

It’s a sign for Haida Gwaii

Haida Gwaii signs will be bi-lingual to respect language

Skidegate man arrested following Queen Charlotte RCMP investigation

Man faces possible drugs and weapons charges

VIDEO: Feds look to help 126 Canadians quarantined in China for coronavirus

China has confirmed more than 4,500 cases of the new virus, with more than 100 deaths

Sap thief taps Saanich park maple trees, faces hefty fine

One tree found with four taps in Mount Doug Park

B.C. reports first coronavirus in Vancouver region

First patient visited Wuhan, China, reported symptoms

Uber threatens legal action to ‘defend its right’ to operate in Surrey

‘I have no concerns,’ Mayor Doug McCallum replies

Victoria resident says WestJet employee uttered racist comment, refused to let her on plane

Customer claims she was told ‘You guys can’t handle your alcohol’ by WestJet employee

Bystander who tried to help dog being attacked not liable for its death: B.C. tribunal

Owner of dog killed tried to get $5,000 in damages from man who tried to save it

INFOGRAPHIC: See how fast your B.C. city grew in 2019

The province’s fastest-growing municipalities were located on Vancouver Island

Landowner hearings begin for Trans Mountain expansion in Alberta

Detailed route talks start in Spruce Grove, in B.C. communities soon

Alessia Cara to host and perform at 2020 Juno Awards

Multi-platinum Canadian singer-songwriter also up for six awards, including Artist of the Year

Most Read