Ernesto S. Ruscio / Getty Images / NetflixFaced with mounting competition to its streaming dominance, rising costs for content and a stagnant domestic subscriber base, the streaming giant has begun fighting a two-front war, hunkering down at home and setting up a blitzkrieg overseas.
The moves helped the company stem a slide that has sapped 21% of its value since July, with investors sending the stock surging 5% this morning after it released its third-quarter results yesterday. For the second quarter in a row, Netflix missed the mark on U.S. subscribers, adding only 500,000 new customers when it was expecting 800,000.
“Its U.S. user base has become so large that it can no longer expect to add a significant number of subscribers there,” says Ross Benes, an analyst at eMarketer. “These past two quarters show that Netflix’s user growth will have to come from international markets.”That has it moving to protect its home turf as competitors like Walt Disney, Apple and NBCUniversal begin building their own streaming services from the ground up.
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