Netflix expects its subscriber growth rate to weaken in the coming months, as upcoming US price rises for its TV streaming site dampen the attraction of new users.
The firm said it had gained a record number of 9.6m paid subscribers in the three months to March, taking its total up to 148.9m and ahead of previous analyst expectations.
It predicted growth of just 5m new subscribers between April and June, falling below the 5.5m expected by Factset-polled analysts.
Investors baulked at the miss by Netflix, particularly in light of rising competition from Disney, Apple and several Hollywood giants. Shares dropped as much as 1.9 per cent in after-hours trading, paring gains of more than three per cent during regular trading.
Disney priced its base plan for its upcoming Disney+ streaming service at $7 (£5.36) per month last week, much lower than Netflix’s most popular $13 plan in the US.
Netflix’s net profit rose to $344.1m in its first quarter, up from $290.1m in the same period last year. While this beat expectations, it was higher largely as a result of anticipated spending on original content being pushed back to later in 2019.
The streaming giant spent $7.5bn on TV shows and films in 2018, an amount which executives expect to increase this year. Popular original shows released last quarter included Russian Doll and Sex Education.
Revenue rose to $4.5bn and met expectations, up from $3.7bn compared to a year earlier.
Hargreaves Lansdown analyst George Salmon said with competitors having previously been slow on the uptake, “Netflix has enjoyed an artificially easy ride so far”.
With the entrance of Disney and Apple, and Amazon’s established Prime Video service growing stronger, Salmon added “at a combined market cap of around $2.2 trillion those three bruisers aren’t to be messed with”.