Investors punished Netflix hard. The company’s course went down sharply after the drivers on Wall Street. With a drop of more than 14 percent, the video giant lost some 24.2 billion dollars in market capitalisation.
Netflix writes in a letter to shareholders that it has overestimated growth. For this quarter, the group has revised its growth forecasts downwards: 5 million new users.
Turnover was $3.9 billion, profits rose to $384 million, compared with $66 million a year ago. Netflix had some 130 million paying users worldwide at there end of the quarter.
Netflix said it will be investing more in its own non-English-language productions in the near future. This is necessary because the company observes that HBO and Disney (as well as Amazon and Apple) are catching up. This year, the company investing about $7.5 to $8 billion in content.
The company expects growth to level off in the coming years, partly due to the emergence of large competitors in countries such as Germany and France.