Netflix subscriber forecast misses estimate as streaming war heats upNetflix Inc missed Wall Street subscriber forecasts for the first quarter Tuesday, amid pressure from lower-cost services from Walt Disney Co and Apple Inc in the streaming video wars. The streaming giant added more paying subscribers than Wall Street expected in the fourth quarter, beating international subscriber estimates but missing estimates for U.S. subscriber growth. Netflix shares were up 1.5 per cent in volatile after-hours trading on Tuesday. The company acknowledged that competitive pressure and a recent price hike impacted its US business, where subscriber growth fell short of analyst estimates. Competition had a more muted impact on its viewership in Canada, Australia and the Netherlands, the company wrote in a letter to investors. The Disney+ and Apple TV+ streaming services both launched in the United States in November. Disney+, which is also live in Canada, Australia and New Zealand, will launch in the UK, France, Germany, Italy, Ireland, Spain, Austria and Switzerland on March 24. Apple TV+ is available in over 100 countries and regions. Netflix's first-quarter forecast reflected the potential threat of that international expansion. The company said it expects to add 7 million subscribers globally in the first quarter, below analysts' average of 8.82 million, according to IBES data from Refinitiv. Netflix said it added 8.76 million paid global subscribers in the fourth quarter, boosted by strong releases that included a new season of royal drama "The Crown" and two films nominated for Best Picture Oscars. It beat the 7.6 million average expectation of analysts, according to IBES data from Refinitiv - the same growth Netflix forecast for the quarter. The Disney+ service launched in the United States and Canada for $7 (5.37 pounds) per month and $13 (9.97 pounds) a month for a bundle with ESPN+ and Hulu; it reached 10 million sign-ups on its first day. Apple TV+ launched Nov. 1 for $5 per month and is free for one year with the purchase of some Apple devices: its performance has been harder to define. AT&T-owner WarnerMedia's HBO Max will cost $15 per month when it launches in May. Netflix is available in over 190 countries; its standard US plan costs $13 per month. Netflix has had an outsized impact on the pay TV landscape, changing the way that people consume TV and film and forcing media and tech companies to shift their business models. As streaming video has grown in the United States, the market has become more competitive, pushing Netflix to look overseas for growth. As such, the company has invested heavily in non-English language content, and this quarter began releasing revenue and subscriber numbers by region for the first time. It added 1.75 million subscribers in Asia-Pacific, its fastest-growing region, while Latin America grew by 2.04 million subscribers in the quarter. As rivals have pulled their content off of Netflix, the company has poured money into original TV series and films. It had a $15 billion cash budget for content last year and $14.76 billion in long-term debt as of Dec. 31, 2019. "Friends" left Netflix in the United States this month and will run on HBO Max. "The Office" is leaving the service at the end of 2020 and will be available on Comcast-owned NBCUniversal's forthcoming Peacock streaming platform next year. "The streaming service's massive content and marketing budget can only be justified if the company is adding more subscribers at a robust rate. If that doesn't materialise, then its stock price will reflect that reality," wrote Haris Anwar, an analyst at investing.com. The addition of new streaming platforms - taking more out of a household's monthly entertainment budget - has also made it harder for Netflix to raise prices, as it did in the United States last year. Free, advertising-supported services such as Peacock and ViacomCBS-owned Pluto TV may also limit Netflix's pricing power, according to research from Citigroup. 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. 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.

Netflix Inc missed Wall Street subscriber forecasts for the first quarter Tuesday, amid pressure from lower-cost services from Walt Disney Co and Apple Inc in the streaming video wars.

The streaming giant added more paying subscribers than Wall Street expected in the fourth quarter, beating international subscriber estimates but missing estimates for U.S. subscriber growth.

Netflix shares were up 1.5 per cent in volatile after-hours trading on Tuesday.

The company acknowledged that competitive pressure and a recent price hike impacted its US business, where subscriber growth fell short of analyst estimates.

Competition had a more muted impact on its viewership in Canada, Australia and the Netherlands, the company wrote in a letter to investors.

The Disney+ and Apple TV+ streaming services both launched in the United States in November. Disney+, which is also live in Canada, Australia and New Zealand, will launch in the UK, France, Germany, Italy, Ireland, Spain, Austria and Switzerland on March 24. Apple TV+ is available in over 100 countries and regions.

Netflix's first-quarter forecast reflected the potential threat of that international expansion. The company said it expects to add 7 million subscribers globally in the first quarter, below analysts' average of 8.82 million, according to IBES data from Refinitiv.

Netflix said it added 8.76 million paid global subscribers in the fourth quarter, boosted by strong releases that included a new season of royal drama "The Crown" and two films nominated for Best Picture Oscars. It beat the 7.6 million average expectation of analysts, according to IBES data from Refinitiv - the same growth Netflix forecast for the quarter.

The Disney+ service launched in the United States and Canada for $7 (5.37 pounds) per month and $13 (9.97 pounds) a month for a bundle with ESPN+ and Hulu; it reached 10 million sign-ups on its first day. Apple TV+ launched Nov. 1 for $5 per month and is free for one year with the purchase of some Apple devices: its performance has been harder to define. AT&T-owner WarnerMedia's HBO Max will cost $15 per month when it launches in May.

Netflix is available in over 190 countries; its standard US plan costs $13 per month.

Netflix has had an outsized impact on the pay TV landscape, changing the way that people consume TV and film and forcing media and tech companies to shift their business models. As streaming video has grown in the United States, the market has become more competitive, pushing Netflix to look overseas for growth.

As such, the company has invested heavily in non-English language content, and this quarter began releasing revenue and subscriber numbers by region for the first time. It added 1.75 million subscribers in Asia-Pacific, its fastest-growing region, while Latin America grew by 2.04 million subscribers in the quarter.

As rivals have pulled their content off of Netflix, the company has poured money into original TV series and films. It had a $15 billion cash budget for content last year and $14.76 billion in long-term debt as of Dec. 31, 2019. "Friends" left Netflix in the United States this month and will run on HBO Max. "The Office" is leaving the service at the end of 2020 and will be available on Comcast-owned NBCUniversal's forthcoming Peacock streaming platform next year.

"The streaming service's massive content and marketing budget can only be justified if the company is adding more subscribers at a robust rate. If that doesn't materialise, then its stock price will reflect that reality," wrote Haris Anwar, an analyst at investing.com.

The addition of new streaming platforms - taking more out of a household's monthly entertainment budget - has also made it harder for Netflix to raise prices, as it did in the United States last year.

Free, advertising-supported services such as Peacock and ViacomCBS-owned Pluto TV may also limit Netflix's pricing power, according to research from Citigroup.

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.

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.

Netflix price cuts heating up streaming war in India as data costs go up

Netflix Inc and its rivals are facing a price war in India as a jump in the cost of watching video on mobile phones threatens to slow demand in what is shaping up as a key growth market globally for streaming.

The country’s three wireless carriers hiked data tariffs by as much as 41% earlier this month, leaving some customers in India, where most streaming is done on phones, with less to spend on entertainment services like Netflix, Apple Inc.’s TV+ service -- which debuted there last month -- and those of local competitors.

Cheap broadband, a well-established film culture and a vast English-speaking population have helped make India a lucrative streaming battleground, with Netflix targeting 100 million subscribers in the country, almost 25 times the customer base as of this year. But an increase in data costs, coupled with a wider slowdown in the economy, could make customers more sensitive to how much they pay for content, just as players like Apple and Amazon.com Inc.’s Prime try to dig a foothold in the market.

“This is a challenge that will affect growth, as the mobile data boom has been a big factor driving adoption in India,” said Utkarsh Sinha, managing director of Bexley Advisors, a boutique investment bank focused early-stage deals in tech and media. “The Indian user has largely used data like running water without thought.”

Netflix is already trying to get ahead of the move, slashing prices by as much as half for subscribers that commit to at least three months. Most of the country’s streaming services, including Apple TV+, Amazon Prime and Walt Disney Co.’s Hotstar have also offered discount deals this year and subscriptions at prices well below those in other markets. Apple’s new TV+ service, for example, sells for about $1.40 a month in India, compared with about $5 in the U.S. and Japan.

Spokespeople for Netflix, Amazon, Apple and Hotstar in India declined to comment.

“As all platforms become equally competitive on content, pricing will be a key lever to pull to draw in customers and encourage churn,” said Sinha. “Netflix has introduced an India-only price, and Amazon is already subsidizing its Prime offering through a package deal.”

The price pressures add to what is already a cutthroat streaming market, with some 30 operators hawking online video services in the country of 1.3 billion people. Viu, a smaller streaming player run by Hong Kong-based PCCW Ltd.’s media arm, recently decided to exit the market because it lacks the cash to challenge bigger rivals, India’s Economic Times reported Dec. 16, citing an executive it didn’t name at Viu.

While the affect of higher mobile phone tariffs will ripple across the industry, services that draw higher-income Indians who can easily afford to pay a little more for wireless access are somewhat insulated, said Mihir Shah, India vice president at Media Partners Asia in Mumbai. Free services -- like Bytedance Inc.’s TikTok and social media video sites will take a more direct hit as it becomes more expensive to watch on wireless devices, he said.

In aggregate, streaming services will continue to grow, even as costs rise, he said.

While the big streaming brands are competing on price, they’re also spending money on content to offer India’s viewers more.

Netflix Chief Executive Officer Reed Hastings has said the company wants to become “more Indian” in its content offering and plans to spend as much as $420 million to create local TV and films. Disney’s Hotstar has drawn hundreds of millions of active users to exclusive sports programming, especially cricket, the nation’s most popular game. For its part, Apple is adding to its TV+ offering a series based on the bestselling novel Shantaram about a convicted Australian bank robber and heroin addict who escapes from prison and lands in the slums of Mumbai.

ALT Digital, Netflix's budget Indian rival, eyes original shows for profits

A small rival of Netflix Inc in India plans to ramp up production of low-cost web shows in order to turn profitable.

ALT Digital Media Entertainment Ltd aims to produce about 60 new web shows through a joint venture over the next two years, helping it to break even at the net income level. That would add to the 42 shows already owned by the company, which is the online-streaming unit of Balaji Telefilms Ltd.

“We are a pure-paying model right now, but once we reach that threshold of around 100 originals, we may think on advertising,” Nachiket Pantvaidya, ALT Digital’s chief executive officer, said in an interview at his office in Mumbai last week.

While much smaller than Netflix, Balaji is about 25% owned by Reliance Industries Ltd, the giant conglomerate controlled by Asia’s richest man Mukesh Ambani. And India’s lower and middle income digital consumers prefer regional content, according to KPMG, which may favour local providers with that demographic.

“I think one has to cater to either the classes or the masses; trying to have both the pies will lead to a confused strategy and may not work well,” said Pantvaidya, who serves as chief operating officer at Balaji Telefilms in addition to running ALT Digital.

While Netflix and other major players cater primarily to urban subscribers with high-cost global productions, ALT Digital’s ALTBalaji service is focused mainly on Hindi-language shows, targeting people between 20 and 40 years old who live in India’s 30 largest cities. Netflix has four monthly plans in India ranging from Rs 199 to Rs 799. ALTBalaji offers a three-month subscription for Rs 100 and a 12-month plan for Rs 300. 

ALTBalaji expects its revenue to nearly double this fiscal year to about Rs 80 crore. Profitability should be helped by the fact that Balaji Telefilms will fund most of its planned production expenses. ALTBalaji and its partner Zee5, an online-streaming platform of Zee Entertainment Enterprises Ltd, aim to spend about Rs 250 crore over the next two years.

“We are committed to providing content for the masses, and only 5% of what we want to produce will be super-premium shows with an expensive star cast,” Pantvaidya said.