Netflix subscriber growth misses its mark in Q1

Andrew Burton  Getty Images

Andrew Burton Getty Images

Dwelling on the subscriber guidance, the analyst said the company's domestic subscriber guidance of 0.6 million was ahead of his estimate of 0.21 million and the consensus estimate of 0.19 million.

Netflix missed estimates for subscriber growth for first quarter 2017.

In the period the platform added 5 million members, down from the 7 million added in Q4 2016.

"Everybody watches TV, and almost everybody has the internet", Hastings added, saying that he does not see anything that could stop Netflix from reaching to most people in the U.S and hopefully most people around the world. That's still almost double the $0.09 per share Netflix reported in the second quarter of 2016.

"We expect to cross the 100 million member mark this weekend", Netflix wrote in its letter to shareholders Monday.

The US-based streamer added 1.42 million US subscribers and 3.53 million internationally during the period, down on its projections of 1.5 million and 3.7 million respectively.

Netflix ended March with almost 48 million subscribers outside the U.S.

Netflix expects to add 2.6 million subscribers internationally next quarter - it launched in 130 additional countries previous year - and 600,000 subscribers in the USA, both which exceed analyst estimates.

Netflix said its recent release of the Dave Chappelle specials "The Age of Spin" and "Deep in the Heart of Texas" were among its most viewed comedy specials.

The firm had predicted that it would see a growth of 5.2 million subscribers in this quarter, however the streaming firm only managed to gain 4.95 million.

The trend has confronted Netflix with more competition in the battle for household entertainment budgets. Netflix so far has responded to the challenge by employing heavily on original productions like "House of Cards" and "Stranger Things" and marketing its service at a comparatively low price. "We have YouTube envy", Hastings joked.

In terms of revenue, Netflix saw a 35% year-over-year increase to reach $2.64 billion in the first quarter, meeting expectations, and EPS was $.40 per share, above the $0.37 that analysts expected. Netflix started life as a DVD rental business in 1998, but launched its video streaming service in 2007. But, it insisted that the opportunity for growth was "gigantic".

Netflix's marketing budget has almost doubled over the past few years from $607,186 in 2014 to a forecast of more than $1 billion this year.

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