Shares of Netflix declined 4 percent in afterhours on Monday after the world’s largest video streaming company reported lower new subscriptions for the 2nd quarter that missed the consensus estimate, even with the company gaining more recognition from their highly acclaimed original content series.
Netflix received 14 Emmy nominations this year for their original content series, with nine Emmy nominations coming alone for the House of Cards.
Nominating an online video company for 14 Emmy nominations has raised some eyebrows across corporate boardrooms of network television and cable distribution companies which are still adjusting to the emergence of new online streaming video companies such as Amazon, Hulu, Google (U-Tube) and Netflix that are now developing their own original content for their own streaming audiences with two more on the way coming from Microsoft (X-Box 360) and Yahoo.
“Over the last six month, our move into Original programming has begun to redefine Netflix in the eyes of consumers. Our first five series-Lilyhammer, House of Cards, Hemlock Grove, Arrested Development Season 4, and Orange is the New Black– have engaged large audiences across our markets and are very different, allowing us to broaden our overall reach with each new Original” wrote Netflix CEO Reed Hastings in a letter to Netflix investors.
Russ Shaw, an analyst from Tech London Advocates, said today on Bloomberg’s Countdown that he is still bullish on Netflix and believes that Netflix’s decision to create their own content will ultimately bring in more new customers.
“I think that they are certainly carving out a niche where they are definitely focusing on that unique content. They are creating their own. It’s getting a lot of headlines, it’s creating a lot buzz in lips if you will” said Shaw.
“People are talking about watching Arrested Development after so many years. That’s really exciting …..and that gets people talking and chatting. And I think that word of mouth is going to help them to bring in more new customers” Shaw said.
Netflix added 630,000 new U.S. customers for the 2nd quarter, matching their own forecast but still missing the consensus estimate of 676,000.
Total U.S. customers in the 2nd quarter of 2013 came in at 29.81 billion compared to 23.94 in the 2nd quarter of 2012.
Netflix is forecasting 30.90 million U.S. customers for next quarter.
The number of international customers grew in the 2nd quarter of 2013 to 7.75 million compared to 3.62 million in the 2nd quarter of 2012.
Netflix is forecasting 8.65 million international customers for next quarter.
Netflix reported year over year 2nd quarter revenue that was in line with the consensus estimate of $ 1.069 billion, growing 20 percent and beating $ 889 million in revenue for the 2nd quarter of 2012.
Netflix’s net income grew to $ 29 million in the 2nd quarter of 2013 compared with $ 6 million in the 2nd quarter of 2012.
* Note- Concerning yesterday’s post here about Apple’s iRadio “not offering full access to entire albums like the other subscriber companies currently offer.”
This topic is worthy of a little more explanation.
iRadio won’t allow their radio listener to play all songs from a single album in a row, similar to what is currently available on Spotify. However, Apple will allow for a pre-release stream of an entire album.