Netflix Factored Competition Into Forecast of Decline in Q4 Paid Net Adds, Says CFO
Netflix forecast a year-over-year decline in Q4 paid net subscriber additions, and factored into that projection that “a few new competitors” are launching streaming services “in the near term,” said Chief Financial Officer Spencer Neumann on Q3 Wednesday evening. “Inevitably,…
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there is probably going to be some curiosity and some trial of those competitive service offerings,” said Neumann. “We're just trying to be prudent about our Q4 forecast.” The outlook for 7.6 million paid net adds includes a 61 percent decline in the U.S. Overseas paid net adds are expected to decline 4 percent. That Netflix will have recorded nearly 27 million net paid adds in 2019 makes this “a tremendously strong year,” said Neumann. It had 5 million paid net adds in the U.S. in 2018 and this year is forecasting a decline to 2.6 million, said CEO Reed Hastings. “So the gap's almost entirely in the U.S.” Disney “is going to be a great competitor,” and so will Apple, he said. “All of us are competing with linear TV.” Just as “multiple cable networks” competed with broadcast TV and not with one another over the past 30 years, “it's the same kind of dynamic here,” he said. The stock closed 2.8 percent higher Thursday at $294.30.