The Netflix Group is currently experiencing increased competition, particularly with the advent of Apple and Disney services in its segment. The group thus issued a cautious outlook this morning, which we suggest you discover here in more detail.
The Netflix Group has therefore been cautious about its 2020 outlook after having only recruited 550,000 new subscribers in the United States and Canada, two countries that generate the largest share of the company's turnover.
This figure is one of the elements taken into account by investors when considering this value, as the group emphasizes the internationalization of its activities and the 8.8 million new subscribers during the last quarter. In its press release this morning, the American group announced: " Streaming is a global phenomenon and we are working hard to consolidate our previous progress. "
However, it should be remembered that the company was expecting more than 600,000 subscribers in the USA and Canada in October when it announced that it would be able to compete with the two giants Apple TV+ and Disney +. For the first quarter of this new year, the Group expects to add only 7 million new subscribers compared to more than 10 million last year.
The US group explains this forecast through various factors, including a continuation of churn in the US which is slightly higher than expected. Spencer Neumann, the current CFO of Netflix, explained that this is due to a combination of price and competition, given that that Netflix's subscriptions are more expensive than those of its main competitors in these geographical areas, who are banking on this strategy to be more competitive and attract more customers.
Also in this morning's press release, Netflix Group CEO Reed Hastings stressed that Netflix's success over the past 20 years has been primarily due to the fact that it gives pleasure to subscribers.
Netflix insists in particular on the very strong programming planned for the second quarter of 2020 with, in particular, season 4 of the Casa el Papel series and several major investments in more regional products.
The Group also anticipates an internationalisation of competition in the coming year and is therefore cautious in the way it analyses the impact of this on its activities. Of course, Netflix invests large sums of money in order to attract the favours of stars of the big screen and thus produce strong programmes. In particular, he indicated that he was at the top of the Oscar nominations this year with 24 nominations compared to only 23 for Disney and 20 for Sony. We are therefore looking forward to the rewards of this ceremony.