Netflix reported earnings today of 96 cents per share at a revenue of $1.41 billion, a profit much higher than expected by market analysts -- but dipping subscriber figures has caused Netflix stock to tank after hours, dropping 20 percent at the time of writing and getting lower by the minute.
The streaming video company reported their above average earnings today, but shareholders reacted more strongly to subscriber figures; Netflix only added 980,000 domestic subscribers in Q3 2014, well below the expected 1.37 million subscriber additions predicted by analysts.
The dipping subscriber figures are no doubt a result of an increasingly competitive market which threatens Netflix's foothold. Despite unique offerings, including Netflix Originals like Orange is the New Black and House of Cards, as well as a wealth of 4K content (available at a premium), users are increasingly moving towards other streaming services like Amazon Prime and HBO Go.
Other media companies are also looking to get a slice of the Netflix pie; Yahoo! recently announced two original shows, coming in 2015, for their new video-sharing site. And however briefly, Microsoft also planned to launch a Netflix-like entertainment service before closing its doors on the studio during the largest round of Microsoft layoffs ever.
Despite dipping subscriber figures, Netflix is still optimistic that it will continue to grow in upcoming quarters. According to a shareholder letter, the company expects to add nearly 4 million subscribers in Q4 2014, and increase its revenue significantly in the long-term.
Source: Business Insider