It all comes down to the company’s streaming video subscribers and its forecast of slower growth.
The company’s streaming subscriber growth accelerated, with a net add of 1.74 million in the quarter, pretty much in line with projections. But it failed to hit the higher end of the company’s guidance, which many analysts hoped it would surpass. And the company expects growth to slow in the current second quarter—projecting the addition of at most 800,000 subscribers. This as the company warns that its DVD subscribers could decline at an accelerating rate—to as little as 8.95 million at the lower end of projections. (Get Netflix latest stock quote here.)
CEO Reed Hastings didn’t shy away from acknowledging its growing number of competitors. Hastings says it does watch Hulu “carefully” and “given Amazon’ssize and ambitions, we continue to track their progress carefully as well.”
Hastings says he’s watching these companies over his shoulder despite the fact that his subscriber numbers dwarf Hulu and Amazon’s . But Hastings reiterated the fact that he sees the biggest challenge coming from media giants and cable operators ‘TV Everywhere offerings.” In addition to HBO Go , Hastings citedComcast’s XFinity app. Hastings says he doesn’t see “any meaningful near-term impact on our business.” But it’s clearly a challenge he has his eye on.