Netflix Inc. is facing the toughest year in its history in terms of new streaming competition, but the company says it\u2019s ready.<\/p>\n
With technology and media giants such as Apple Inc., AT&T Inc., Comcast Corp. and Walt Disney Co. all bringing new video platforms online, Netflix is working to keep customers loyal with a flood of shows and movies. The company plans to boost its spending by 20% this year, bringing its programming budget to about $12 billion on a profit-and-loss basis.<\/p>\n
\u201cWe view our big long-term opportunity as big and unchanged,\u201d Chief Executive Officer Reed Hastings said during a pretaped recap of its fourth-quarter earnings, released Tuesday.<\/p>\n
Netflix climbed as much as 4.3% in late trading after delivering generally upbeat results, with overseas growth helping offset a slowdown at home. Though the company expects to add fewer subscribers in the current quarter than Wall Street projected, it said there\u2019s \u201cample room for many services to grow.\u201d<\/p>\n
Netflix investors have been grappling with whether the company\u2019s days of reliable growth are over. The company added fewer customers in 2019 than it did in 2018, and its increase in the U.S. and Canada decelerated by more than 3 million. In posting the results Tuesday, Netflix said price hikes and a growing array of options have made it harder to attract customers.<\/p>\n
It\u2019s only going to get tougher. Apple\u2019s TV+ and the Disney+ platform both launched in the U.S. during November, enticing consumers with lower-cost services, while AT&T\u2019s HBO Max and Comcast\u2019s Peacock are both coming online in the next few months.<\/p>\n
All those competitors are likely to slow customer additions and increase the number of existing customers who cancel Netflix.<\/p>\n
Against that backdrop, Netflix posted its weakest year of domestic subscriber growth since it first broke out its online service from the company\u2019s traditional DVD-by-mail business in 2011. Netflix is projecting a gain of 7 million paid subscribers worldwide in the first quarter, short of the 7.82 million estimate.<\/p>\n
\u201cWe are working hard to improve our service to combat these factors,\u201d it said in a letter to shareholders.<\/p>\n
But the Los Gatos, California-based company argues that its strategy is still sound, and competition shouldn\u2019t cause it to change course. Losing popular shows such as \u201cFriends\u201d to its new rivals has had no impact on viewership so far. Netflix subscribers are just finding other shows to watch, Chief Content Officer Ted Sarandos said.<\/p>\n
For proof, Netflix can point to its global growth in the latest quarter. The company added 8.76 million customers in the period, compared with forecasts of 7.65 million. Hastings described them as \u201camazing numbers.\u201d<\/p>\n
Netflix has pinned its future potential on growth outside the U.S., where it doesn\u2019t yet face the same level of competition. Europe and Latin America have been the company\u2019s engine in the past couple years, and continued to serve that role in the fourth quarter. Netflix added 4.4 million customers in Europe, bringing its overall total to almost 52 million, and another 2.04 million customers in Latin America.<\/p>\n
Netflix plans to release more than 100 seasons of local language programming next year. Though its biggest global hits are mostly English-language shows such as \u201cStranger Things\u201d and \u201cThe Witcher,\u201d its most popular programs in many territories are in other languages, like Spain\u2019s \u201cCasa de Papel.\u201d The company is also experimenting with different pricing plans in Asia.<\/p>\n
Netflix has borrowed billions to fund all that programming, and its long-term debt stands at almost $15 billion. But the company said this past year will mark the high-water mark in terms of its cash burn. Earnings of $1.30 a share also handily beat analyst estimates of 30 cents, lifted by a tax benefit.<\/p>\n
Investors weren\u2019t sure what to make of Netflix\u2019s results at first. The shares had dropped as much as 3% to $327.97 in extended trading before rebounding. The company\u2019s shares climbed 4.5% so far this year before the close.<\/p>\n
\u201cAfter several years of unchecked dominance in the U.S. streaming-video industry, Netflix faces high-profile new streaming rivals,\u201d Geetha Ranganathan, a Bloomberg Intelligence analyst, said in a report. \u201cYet the breadth of its content and a compelling value proposition will make it hard for new entrants like Disney+ to unseat the company.\u201d<\/p>\n
Netflix Inc. is facing the toughest year in its history in terms of new streaming competition, but the company says it\u2019s ready.<\/p>\n","protected":false},"author":341034,"featured_media":236520,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[12857,2054],"class_list":["post-335972","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-disney","tag-netflix"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/335972"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=335972"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/335972\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/236520"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=335972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=335972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=335972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}