Netflix’s victories still fall short with investors
Netflix gained over five million subscribers last quarter, but that fact did not appease the company’s investors, who estimated that the media services provider would gain closer to six million subscribers.
Even though Netflix continues to dominate the media market, investors are not impressed; it seems as if the bar is just set too high for the media mogul.
In its second fiscal quarter, Netflix generated $3.9 billion in sales and $384 million in profit, yet its stock still dropped 13 percent on Monday.
Investors are worried about Netflix’s competitors gaining ground. Although the company is the most popular streaming platform among consumers, investors still want more. With the recent AT&T-Warner merger and Disney’s anticipated acquisition of Fox, Netflix certainly has to worry about newfound rivals stepping into the ring.
In addition, companies including Apple, Amazon, and Hulu have continued to pour money into original content, which could pose a significant threat to Netflix.
The Los Gatos-based company attempted to alleviate investors’ concerns in its shareholder letter:
We believe that consumer appetite for great content is broad and that there is room for multiple parties to have attractive offerings. Our strategy is to simply keep improving, as we’ve been doing every year in the past.
5.2 million subscribers and $384 million in earnings are both incredible numbers. Most companies would be ecstatic about these figures, but because it’s Netflix, investors want more. The company is the media giant nowadays, and investors expect it to deliver nothing but spectacular results.
Featured Image via Flickr/Matthew Keys
