Netflix "still sets the benchmark" despite missing subscriber target

SVoD added around half of predicted subscribers in Q2

Author:

Jenny PriestleyPublish date:

Jul 17, 2018

Netflix has announced it missed its target for new subscribers in the second quarter of the year.

The SVoD service added 670,000 streaming customers in the US, about half of the 1.2 million additions the company had projected. Internationally, Netflix said it added about 4.47 million new subscribers, short of its quarterly target of five million new subs.

We had a strong, but not stellar Q2, the company said in a statement. This Q2, we over-forecasted global net additions which amounted to 5.2 [million] vs. a forecast of 6.2 [million] and flat compared to Q2 a year ago, as acquisition growth was slightly lower than we projected.

Despite the miss, analysts are still bullish about the streamers prospects. Technology, media and telecoms analyst Paolo Pescatore said: This latest quarter may be a slight falter for Netflix, but it still sets the benchmark for its rivals. It underlines my belief that Netflix needs subscribers and it needs them fast. It is still growing, but not quickly enough in light of its growing costs.

Typically, this is always a challenging quarter due to seasonality. And more so this quarter given the success of key global events such as the World Cup in driving fans to tune into live TV. This might have a further negative impact on its third quarter results.

Telcos and Netflix need each other. Netflix has been extremely smart, relying on local partnerships as a way of growing its subscriber base. Netflix is doing what it needs to do, solely focused on content. But it needs scale, and this is where the telcos come in, especially those that do not want to invest sums in securing costly content rights.

Therefore, expect more deals between Netflix and its service provider partners, which the company sees as crucial going forward to attract new users. The next step is towards deeper integration of Netflix among telco offerings.

LINK:	https://www.tvbeurope.com/business/netflix-still-sets-the-benchmark-de...
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