Netflix’s missed its growth targets by a huge margin in the last three months, the company announced on Wednesday, triggering a 10% drop in its share price.
Announcing its latest quarterly figures Netflix said it had added 2.7 million new subscribers worldwide, well below its guidance of 5 million new subscribers and down from 6 million for the same period last year. The company lost 130,000 subscribers in the US from last quarter.
The news comes as Netflix has increased prices and the streaming media giant is preparing to part ways with some of its most watched shows, including The Office and Friends, amid ever-increasing competition.
But in a letter to shareholders the company said competition was not a factor in its missed forecasts since rival services from Disney, AT&T’s Warner Media, NBC Universal and others are all still in the planning stages.
The company blamed its content slate for the miss and said the next quarter, which will include the newly released season of Stranger Things, should be much stronger, with an expected 7 million new subscribers.
Netflix did acknowledge the strength of the competition it will soon face. “Over the next 12 months, Disney, Apple, WarnerMedia, NBCU and others are joining Hulu, Amazon, BBC, Hotstar, YouTube, Netflix, and many others in offering streaming entertainment,” the company told investors.
While the competition for consumers’ time will be “fierce for all companies” it is “also drawing consumers to shift more and more from linear television to streaming entertainment”, said Netflix.
As they get ready to take on Netflix the media companies are also removing some of their popular content from their soon-to-be rival. NBC plans to move The Office to its service and Warner will make Friends exclusive to its platform.
It’s a trend that Netflix has been anticipating for some time. The company has been spending huge sums to build its own content library and the homegrown hits Orange Is the New Black and Stranger Things are now the service’s two most popular shows with subscribers, according to a recent poll.
