Netflix shocks market as shares drop by 15%
INTERNATIONAL - Netflix Inc. stunned Wall Street by attracting fewer subscribers than expected last quarter, renewing concerns that the video-streaming service has become an investment bubble.
The shares plunged as much as 15% after Netflix added 5.2 million users in the period, about a million fewer than it predicted.
Its outlook for the current quarter also reflected a deceleration: The world’s largest paid online TV network expects to add 5 million customers, a slower pace than a year earlier.
Shareholders and analysts now have the job of weighing whether the slowdown is a blip or a longer-term problem. Netflix’s stock had more than doubled this year, with investors betting that the company will add tens of millions of customers around the world for years to come.
Abroad Netflix is testing different packages and prices, it has no plans to increase its monthly fee in South Africa, a Netflix spokesperson told MyBroadband.
The streaming provider recently tested an Ultra tier in Italy, positioned above its Premium tier at €16.99 per month.
With the company testing changes to its plans, this raised the question as to whether more price increases would happen.
Netflix told my broadband that it can confirm that it has no plans for a price increase in South Africa at the moment.
Regarding the Ultra package, along with the changes that go with it, Netflix said the test may never become part of its main product offering.
“We continuously test new things at Netflix and these tests typically vary in length of time. In this case, we are testing slightly different price points and features to better understand how consumers value Netflix,” said the company told My broadband.
- BLOOMBERG, BUSINESS REPORT ONLINE