Netflix ‘Excited’ for 2019 Launch of Disney Streaming Service, Says Hastings

Netflix's price increases on new and existing U.S. customers (see 1901170053) “will obviously impact the rate of net addition growth” in subscriptions for 2019's first half, said CEO Reed Hastings in an earnings interview. But the company “commensurately” also expects average selling prices to improve, “and that’s what we think will drive an acceleration in revenue growth over the course of 2019,” he said. It’s also instrumental in driving operating margin “higher sequentially” each quarter “to enable us to hit that 13 percent target for the full year,” compared with 5.2 percent in 2018's Q4, he said Thursday. Hastings estimates roughly a billion hours of TV content is being consumed daily in the U.S., and Netflix is “winning about 10 percent of it,” he said. “We’re excited” for the 2019 launch of Disney's direct-to-consumer service (see 1901180026), he said. “Maybe they grow over a couple of years to 50 million hours a day, but that’s out of the billion, and so we compete so broadly with all of these different providers,” including new services entering the market, he said. “That’s why we don’t get so focused on any one competitor.” Shares plunged nearly 5 percent early Friday before closing 4 percent lower at $339.10. Analysts said investors were unhappy with the company's Q4 operating-margin performance, its conservative Q1 U.S. subscriber forecast and that it missed its $4.2 billion Q4 revenue target, albeit barely. MoffettNathanson nevertheless told investors Friday it gives the company's "future U.S. pricing narrative" high grades. Netflix "continues to excel in content procurement and discovery," compared with "the feeble efforts by some traditional media companies" to build "attractive" and competitive streaming offerings, it said.