FILE PHOTO: The Netflix logo is shown in this illustration photograph in Encinitas, California October 14, 2014. REUTERS/Mike Blake/File Photo
(Reuters) – Netflix Inc added more subscribers than expected in the fourth quarter, but membership growth lagged in the United States and Canada due to stiff competition and pricing changes, sending shares down 1.6% in extended trading.
The streaming giant, which had set aside $19 billion for content last year, is losing popular shows to new rivals, including 90s hit sitcom “Friends” that will move to AT&T Inc’s upcoming streaming platform HBO Max.
Content from Comcast Corp, Disney, Fox and AT&T Inc-owned Warner Brothers accounted for more than half of Netflix’s viewing hours in 2019, according to Wedbush analysts.
Netflix, which helped create the category of binge-watching, said on Tuesday it added 420,000 U.S. subscribers, below market estimates of 659,600, according to IBES data from Refinitiv.
Netflix has beefed up its non-English content slate to add more international audience as domestic subscriber growth slows.
The company expects to add 7 million subscribers in the first quarter, below analysts’ average of 8.82 million, with Walt Disney Co and Apple spending on original content to lure subscribers.
Net income rose to $587 million, or $1.30 per share, in the fourth quarter from $134 million, or 30 cents per share, a year earlier.
Total revenue rose to $5.5 billion from $4.2 billion a year earlier. Analysts on average had expected $5.45 billion. Excluding items, it earned $1.30 per share compared with analysts’ average estimate of 53 cents per share.
The streaming giant said it added 8.76 million paid subscribers globally compared with expectations of 7.63 million, according to IBES data from Refinitiv.
Reporting by Neha Malara in Bengaluru and Helen Coster in New York; Editing by Arun Koyyur