Published: Sat, January 19, 2019
Culture&Arts | By Dora Pope

Netflix forecast misses Wall Street view, shares dip

Netflix forecast misses Wall Street view, shares dip

After streaming giant Netflix came under fire for including footage of a real-life, deadly incident that occurred in Canada in its breakout monster movie Bird Box, the company said yesterday it will not pull that imagery from the film. The Los Gatos, California-based company said this week it was hiking its rates by $1 to $2 a month in the U.S.

"Results won't push its stock higher from here, with most of the good news already priced in after a massive rally earlier this month", said Investing.com senior analyst Haris Anwar. The light subscriber forecast for the current quarter is partly the result of the price increase Netflix announced Tuesday. Multiple news agencies are reporting that Netflix confirmed the footage shown at the beginning of Bird Box is Lac-Megantic disaster footage but that it will not be removed.

The basic Netflix subscription is increasing from $8 to $9, the standard plan is going from $11 to $13, and the premium plan will now be $16 instead of $14.

Shares, which had risen sharply in recent weeks, dipped more than 3% in after-hours trade, after revenue for the fourth quarter fell shy of analyst expectations.

The company released its massively popular dystopian movie "Bird Box" in late December, which helped attract a record 8.8 million new paid streaming customers in the fourth quarter. The incredible subscription growth clearly justifies hiking membership prices in the US.

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In an earnings report sent to shareholders, the streamer also said that Elite, one of its Spanish original shows has been viewed by 20 million households, and new series Sex Education is on target to top 40 million viewers within the next few weeks. "We compete with (and lose to) Fortnite more than HBO", the letter to investors said. Notably, almost 84% of that subscriber growth came from overseas.

But a Netflix spokesman told the AP on Thursday that it wasn't planning to cut the footage from "Bird Box", saying, "We will keep the clip in the movie".

Revenue grew 27.4 percent, to $4.19 billion.

AT&T Inc T.N and Comcast Corp CMCSA.O also have digital offerings in the works. It sees net income of $253 million for the first quarter, well below analysts' average estimate of $371 million.

Netflix added 781 hours of original programming in the United States and expects to spend $3bn this year to acquire the rights to programmes and produce more of its own content. It expects to add another 8.9 million subscribers in the quarter that ends in March, the vast majority of which are expected to come from strong growth in its global markets.

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