Netflix says opportunity 'gigantic' despite slowing growth

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Cast of Stranger ThingsImage source, Getty Images
Image caption,
Netflix' science fiction-horror series Stranger Things, featuring Winona Ryder (centre) and Millie Bobby Brown (second from right), has been a hit

Netflix has grown slower than it expected in the first three months of the year, but insists that the opportunity for growth is "gigantic".

The streaming firm added 4.95 million new subscribers in the quarter, fewer than the 5.2 million it had forecast.

In the US, the firm added a third fewer new members than the same period a year ago, while overseas members fell 22%.

Netflix blamed the drop partly on shifting some of its popular shows to the second quarter of the year.

The firm said its House of Cards series, which last year debuted in the first quarter but for this year has been pushed into the second quarter, was the main reason for the lower-than-expected subscriber growth.

Netflix said it still expected to add 8.15 million new members in total for the first half of the year, just below the 8.42 it added in the first half of last year.

By this weekend, the firm said it expected to reach 100 million subscribers globally.

"It's a good start," said chief executive Reed Hastings.

Image source, Getty Images
Image caption,
House of Cards, starring Kevin Spacey, has been pushed into the second quarter this year

He said that the growth of the global internet meant the opportunity for the firm was still "gigantic", and said the firm planned to continue investing in films and shows aimed at increasing its membership.

"We have come to see these quarterly variances as mostly noise in the long-term growth trend and adoption of internet TV," he added.

Analysis by Dave Lee, BBC North America technology reporter, San Francisco

As ever, Wall Street is obsessed with user growth above almost any other metric a technology company can offer.

Netflix didn't add as many new users in the last quarter as investors had been expecting, both in the US and internationally.

Aggressive marketing is still a huge part of Netflix's expenditure - $1bn expected this year - so it shows those new subscribers really aren't coming easy.

But I think things will probably improve this year with the roll-out of the new seasons of House of Cards and Stranger Things, both blockbuster shows that represent the very best of their "Originals" brand.

The firm increased revenues by over a third to $2.64bn for the quarter compared to the first three months of last year, while net income rose to $178m from $28m.

Its shares fell in after-hours trading, dropping 3% with investors disappointed by the slower-than-expected growth.

Netflix said it would continue to focus on original programming, aiming to "please diverse tastes with a wide breadth of content".

The company started making its own shows in 2013, with House of Cards one of its first big hits and Stranger Things more recently. Netflix plans to spend more on original content this year and reduce outlays on licensed material such as movies.