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Netflix to ‘simply keep improving’ despite lack in subscriber growth

Despite its massive push into content, Netflix has still missed its membership growth forecast of 6.2 million for the second quarter of 2018 (Q2 18), witnessing only a 5.2 million growth to 130 million memberships. This saw the global streaming service provider post a revenue of US$3,907 million for Q2 18, compared to US$2,785 million during the same period last year.

This membership growth rate of 5.2 million in Q2 18 was similar to the number garnered during the same period last year. For this quarter, Netflix added 4.5 million subscribers internationally, equivalent to an 8% growth. On the other hand, it added approximately 670,000 subscribers in the US, compared to a forecast of 1.2 million for the second quarter

Total streaming revenue for Q2 18 is US$3,814 million, up from US$2,671 million during the same period last year. International revenue for the recent quarter is US$1,921 million, compared to US$1,165 million in 2017. Meanwhile, US streaming revenue amounted to US$1,893 million, compared to US$1,505 million during the same period last year.

Despite the hurdles, Netflix said in the financial statement that “there has never been a better time to be a creator or consumer of content.” This comes as the internet entertainment service industry is evolving, with HBO and Disney focusing their efforts in this space, and Amazon and Apple investing in content as part of larger ecosystem subscriptions. YouTube has also solidified its position as one of the popular internet entertainment services worldwide.

Moving forward, Netflix forecasts a total revenue of US$3,988 million for Q3 18. It also predicts to add 5.0 million subscribers globally for the next quarter, compared to 5.3 million during the same period last year. Out of the 5.0 million, international subscribers will comprise 4.35 million while US subscribers will form the remaining 650,000.

(Read also: Netflix to increase marketing spend to US$2bn)

The statement also added that there is now a consumer appetite for great content and as such, there is room for multiple parties to have attractive offerings. It anticipates more competition from the AT&T-Time Warner deal and the FOX-Disney deal. Going forward, it added that its strategy is to “simply keep improving” as it has been doing so in the past.

On the content front, Netflix continued to ramp up its production of non-English originals, such as Indian original film Lust Stories and Indian original series Sacred Games. It has also produced original feature films to cater to a wide variety of preferences, such as romantic comedies, and is collaborating with film directors such as Michael Bay and Martin Scorsese to produce more Netflix feature films.

Netflix recently added its “Smart Downloads” feature on Android for members that use its offline mode, which is popular in emerging markets. This move comes as Netflix continues to invest in the consumers’ mobile experience. It is also expanding its partner-based bundle offerings, announcing deals with Japanese telco KDDI and Spanish telco Telefonica. Netflix said it expects to continue adding such deals with partners worldwide.

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