Netflix Q4 US Subs Miss Forecast Amid Disney, Apple Rivalry, but Stock Up After Hours

Netflix missed by 30 percent its target for U.S. paid net subscriber additions in Q4, the first quarter in which it faced head-to-head competition from the November launches of Apple TV Plus and Disney Plus, Netflix reported Tuesday. Netflix had 420,000 net paid U.S. adds in the quarter, compared with Oct. 16's 600,000 projection. It had 1.53 million net paid adds in the U.S. in Q4 a year earlier. It exceeded sub growth forecasts internationally, where Apple and Disney weren't a competitive factor, pulling in 8.33 million net paid adds in Q4, versus the 7 million it predicted three months ago. That outdid the 7.31 million net adds it had internationally in Q4 2018. The “low membership growth” domestically was “probably due" in part to the "US competitive launches,” said Netflix. “We are working hard to improve our service to combat these factors and push net adds higher.” It nevertheless is forecasting Q1 global paid net adds of 7 million, versus 9.6 million in Q1 2019, reflecting "the continued, slightly elevated churn levels we are seeing in the US." In the increasingly competitive landscape, “we have a big head start in streaming and will work to build on that by focusing on the same thing we have focused on for the past 22 years -- pleasing members,” it said. “We believe if we do that well, Netflix will continue to prosper.” Despite the “big debut” Q4 of Disney Plus and Apple TV Plus, “our viewing per membership grew both globally and in the US on a year over year basis, consistent with recent quarters,” it said. Netflix stock rose after regular U.S. trading, up 2.5 percent to $346.40 at 5:22 p.m.