Netflix’s stunning growth phase in Australia appears to be over.
Now it has entered a period of mere ‘‘ steady’ ’ growth, and for investors, it’s a problem.
The streaming video company reported its quarterly results in the US on Tuesday. Shares have tanked by as much as 10 per cent in after hours trading, after it forecast weaker than expected growth in subscribers in the current quarter – and it turns out Australia is a key part of that.
Netflix said it expects to add 2.5 million subscribers globally in the June quarter – 500,000 of them in the US, which is in line with previous quarters; but just 2 million in ‘‘ international’ ’ markets – down from 2.4 million a year earlier.
The reason for the international slowdown? In a word, us.
‘‘ Our international forecast for fewer net adds than prior year is due to a tough comparison against the Australia/New Zealand launch,’’ the company said in its letter to shareholders.
Last year’s launch in Australia and New Zealand created a ‘‘ growth spike’ ’ that saw the number of new international subscribers more than doubling compared to the same period a year earlier. But now ‘‘ while ANZ is growing steadily this Q2, it is less than the launch spike last year,’’ Netflix said.
According to some estimates, Netflix has 1 million subscribers in Australia.
That kind of scale is enviable, but sometimes, for investors, steady growth is not enough.
The other factor that seems to have spooked people is the threat of competition.