Netflix shares dip amid growth concerns

London – Netflix shares plunged nearly 11 percent on Monday over fears the video-streaming company’s growth is stalling because of an attack on its market share from Amazon.

The online giant forecast it would add 500 000 members in the US this quarter, and two million internationally. But the numbers were lower than analysts, who had anticipated 580 000 in the US and 3.5 million globally, were looking for. It has 81.5 million users worldwide.

In January, Netflix became available in more than 130 countries, a huge global push by its chief executive Reed Hastings to offset slowing growth in the US.

“We believe this highlights the increasing challenges facing the company as it expands into more non-English speaking countries and countries with more localised content,” said Mizuho analyst Neil Doshi.

Netflix has not yet launched in China, where it has been exploring an entry for some time. It said this week that it was “continuing discussions” and that “whatever we do” the Chinese market would have only a modest financial effect near-term.

The video streaming group, home to House Of Cards, Marco Polo and Orange Is The New Black, posted a first-quarter profit of $28m (£19.6m), up $4m on last year.

One reason for the slowing growth is that the company has been pushing up its charges. It is also facing tough competition from Hulu and Amazon, which unveiled a new monthly subscription pricing model yesterday Existing subscribers will see their bills rise to $9.99 a month this year.

“Amazon Video will up the ante for acquiring new content. This creates a double-whammy for Netflix (higher content spend and slowing subscriber growth),” said Wedbush analyst Michael Pachter.