One of the founders of Netflix has a message for investors: Just chill!
Shares of the online streaming giant tumbled more than 11 percent Tuesday after the company gave weaker-than-expected subscriber guidance for the second quarter. The stock is now down 16 percent since early January.
However, the company's co-founder, Mitch Lowe, remained undeterred.
"This is a big transitional period," Lowe said Monday on CNBC's "Fast Money" when discussing the growing pains that come with expansion. In that past quarter, Netflix expanded service to 130 new markets. "This is a period where they're just beginning to digest big international growth, which means there's a lot of heavy content costs that haven't had the time to churn out the profits on."
To date, Netflix service is available in more than 190 countries with the exception of North Korea, Syria and China. In its report for the first quarter on Monday after the closing bell, Netflix announced that it gained 6.7 million subscribers, ahead of estimates for 6.1 million.
Lowe, who worked with Reed Hastings, Ted Sarandos and Marc Randolph to establish Netflix in Los Gatos, California, in 1997, now serves as an advisor for Fandor, which is a streaming service for documentaries and independent films. Having spent the bulk of the last two decades setting up distribution models for media, Lowe believes that content will remain king for Netflix.
"The key to remaining on top will be Netflix's ability to consistently release at least three original titles every quarter," Lowe said exclusively to CNBC during an off-camera interview. Lowe noted the buzz that accompanied the March 4 release of the newest season of "House of Cards." If Netflix can continue to create culturally significant programming across multiple genres, he expects the company to thrive without the acquisition of other properties.