Netflix fails to impress with new subscriber numbersTuesday 23 July 2013 11.33
Netflix failed to add as many subscribers as investors had hoped in the second quarter of the year, pushing shares in the company down in after-hours trading.
This is despite the video streaming service quadrupling profit and boosting revenue by 20%.
Netflix earned $29.5 million, or 49c per share, in the second quarter of the year, up from $6.2 million in April to June of 2012.
This was based on revenues of $1.07 billion, 20% higher than the same period of last year and in line with analyst projections.
The company added 630,000 US subscribers during the period, slightly above the mid-range target set by management earlier in the year.
Howevr this disappointed investors, many of whom had hoped to see a figure closer to the higher end of its forecast.
While most of Netflix’s catalogue consists of previously-released films and television programmes, the company has recently begun to produce its own content to help set its offering apart from competitors.
Its remake of BBC drama ‘House of Cards’, released at the start of the year, proved a hit with viewers and critics with subscriber numbers getting a boost following its release.
While the release of new episodes of cult comedy series ‘Arrested Development’ also helped to increase subscriber numbers, the programme failed to have the same impact as the political drama.
Netflix CEO Reed Hastings said the comedy gave produced a "small but noticeable bump" in subscribers.
He argued that the company had successfully added more subscribers during the first half of this year than it did last year, despite intensifying competition from other services.