Netflix Inc shares plunged in after-hours trade on Wednesday after its quarterly update showed weaker-than-expected subscriber growth for the streaming television sector leader.
Netflix said it added 2.7 million new subscribers worldwide in the April-June period, well below expectations, as the sector prepared for offerings from rival groups, such as Walt Disney Co and Apple Inc.
The stock slid 11.97 percent to US$319.07 in after-market trade following the results, which showed revenues and profits largely in line with analysts’ forecasts.
Photo: AFP
Netflix said that it still sees long-term growth on target, dismissing concerns that consumers were gravitating to rivals.
“I think our position is excellent,” Netflix CEO Reed Hastings said in an earnings presentation.
“If investors believe in Internet television, then our position in that market is very strong,” he said.
Hastings maintained that while there might be a streaming television war going on, the market is so vast that rival services can thrive.
He quipped that many Netflix employees are fans of HBO shows.
Netflix, known for its original shows such as The Crown and Orange is the New Black, said the latest shows did not attract as many subscribers.
That, along with hikes in the price of subscriptions in some regions, appeared to dampen growth, Hastings and other top executives said.
Subscriber growth reignited in the opening weeks of the current quarter, with the release of the latest season of blockbuster original series Stranger Things, executives said.
Netflix said revenue for the recently ended quarter grew 26 percent from a year ago to US$4.9 billion and profit fell 29 percent to US$271 million.
Netflix would be losing some of its hit shows, such as Friends, to rival platforms being launched in the coming months, but argued that it would make up for that with original content.
“Much of our domestic, and eventually global, Disney catalog, as well as Friends, The Office and some other licensed content will wind down over the coming years, freeing up budget for more original content,” the company said.
“From what we’ve seen in the past when we drop strong catalog content ... our members shift over to enjoying our other great content,” it said.
WarnerMedia is to launch its new Netflix rival “HBO Max” early next year after reclaiming the rights to stream its popular TV comedy Friends, the company said on Tuesday.
The new service will enter an increasingly crowded TV streaming marketplace, vying for customers with Netflix, Hulu Inc and Amazon.com Inc as, well as the soon-to-be-launched Disney+ and Apple’s upcoming product.
Netflix said that it has no plans to add advertising to its streaming television service.
“We, like HBO, are advertising- free,” the company said.
“That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false,” it said.
The company plans to continue investing in original content to keep and win subscribers, it said.
Netflix also revealed plans to roll out a low-priced mobile-screen plan in India to lure people to its service there.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
JOINT EFFORTS: MediaTek would partner with Denso to develop custom chips to support the car-part specialist company’s driver-assist systems in an expanding market MediaTek Inc (聯發科), the world’s largest mobile phone chip designer, yesterday said it is working closely with Japan’s Denso Corp to build a custom automotive system-on-chip (SoC) solution tailored for advanced driver-assistance systems and cockpit systems, adding another customer to its new application-specific IC (ASIC) business. This effort merges Denso’s automotive-grade safety expertise and deep vehicle integration with MediaTek’s technologies cultivated through the development of Media- Tek’s Dimensity AX, leveraging efficient, high-performance SoCs and artificial intelligence (AI) capabilities to offer a scalable, production-ready platform for next-generation driver assistance, the company said in a statement yesterday. “Through this collaboration, we are bringing two
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
RSS