Netflix, a media service provider, has recently announced a decline in its share by 5%, after recording a fewer number of paid subscribers in the Q3 of 2020. The news comes in line with the rising competition and return of live sports to TV.
The media company has revealed that only 2.2 million new paid subscribers were added across the globe in the Q3 that ended in September, in contrast to the analysts’ estimates of over 3.4 million subscribers. Moreover, the company had previously estimated to add 2.5 million subscribers in this quarter. In the same period a year earlier, it had recorded 6.8 million subscribers.
In the near future, Netflix is targeting to acquire 6 million subscribers worldwide. In addition, shares of the company, a large subscriber gainer in 2020 amid the rising stay-at-home trend to curb coronavirus spread, has declined by nearly 6% to $494 in the recent after-hours trading.
Netflix has predicted that the rapid surge in the number of new sign-ups amid the pandemic is likely to reduce in the latter half of 2020, as the COVID-19 restrictions continue to ease. During the quarter, the company released Emily in Paris, The Devil All the Time, and Enola Holmes, . It is targeted towards gaining more customers as they continue to embrace online entertainment.
The ongoing pandemic has sparked interest among customers in Netflix’s service, due to the temporary closures of the movie theaters and cancellation of sports leagues. Netflix is aware of the increasing competition as studios across the U.S., including Walt Disney and AT&T’s WarnerMedia, have restructured their services to directly compete with the rivals.
Netflix’s revenue recorded a hike of 22.7% to $6.44 billion in the Q3, edging previous estimates of $6.38 billion. Moreover, the company’s net income increased to $1.74 per share or $790 million, as compared to the $1.47 per share or $665.2 million a year earlier.
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