Netflix shares drop 10 percent as it suffers loss of US subscribers
Shares in Netflix have sunk by 10 percent following news that it has suffered subscriber losses and missed targets for bringing on new users.
The streaming service reported that 130,000 subscribers have cancelled their accounts in the US in the second quarter of the this year.
While it gained 2.7 million users globally, the figure was only just over half of the projected five million.
Read more: Friends will stay on Netflix in the UK
“Our missed forecast was across all regions, but slightly more so in regions with price increases,” the company's CEO Reed Hastings wrote in a letter to shareholders.
“We don't believe competition was a factor since there wasn't a material change in the competitive landscape during [the second quarter] and competitive intensity and our penetration is varied across regions.”
Its net income fell in the last quarter from $384 million this time last year to $270 million this year, though total revenue rose from $3.9 billion to $4.2 billion.
Recently Netflix confirmed that it would be losing the Friends catalogue in the US (though it will remain for the time being in the UK), as well as The Office, two of its most-watched shows.
Disney is also removing all of its content ahead of launching its own stand-alone streaming platform in November this year.
Hastings added: “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.”
Read more: Netflix removes suicide scene from 13 Reasons Why
In January, it was reported that the studio will spend $15 billion on new content this year, having spent $12 billion last year.
While Netflix has experienced massive growth in recent years, it will soon be hitting some significant bumps in the road, with Disney's new platform, Disney+, launching and another from Apple, as well as ongoing competition from Sky’s Now TV and Amazon Prime.
“The performance in the next two quarters will be crucial. Fending off the likes of Disney and Apple with one hand while scooping in new customers with the other is a big ask,” he went on.
Disney+ will feature the studio's massive back catalogue of movies and TV series, as well as new content from the Marvel and Star Wars franchises, including Jon Favreau's new show The Mandalorian.
Meanwhile, Apple is said to be spending a staggering $15 million on its new high concept sci-fi series See, starring Jason Momoa, more per episode than was spent on HBO's Game of Thrones.
