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Is Growing Competition Hurting Netflix’s Subscriber Growth?

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Netflix faces competition from other streaming players

Netflix (NFLX) is grappling with pressure from the rising number of competitors in the streaming space, which is denting its subscriber growth. Video streaming services provided by established players such as Amazon’s (AMZN) Prime Video, Hulu, AT&T’s (T) HBO Now, and Alphabet’s (GOOGL) YouTube are gaining momentum in the space. New players such as Walt Disney (DIS), AT&T’s WarnerMedia, Apple, and Comcast’s (CMCSA) NBCUniversal, which are planning to roll out their services by late 2019 or early 2020, are also expected to attract many subscribers with new content and programming, which might dent Netflix’s subscriber dominance in the upcoming years.

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Netflix anticipates slow growth in US subscribers

The company added 8.8 million paying subscribers in the fourth quarter. US (SPY) paid subscriber additions were 1.53 million, and international paid subscriber additions were 7.31 million. The total global paying subscriber base of the company reached nearly 139.3 million at the end of the fourth quarter with additions of 8.84 million subscribers.

However, the company expects its US subscribers to grow at a slow pace due to increased competition, and the recent price hike for US members. For the first quarter of 2019, Netflix anticipates 1.6 million paid subscriber additions in the US, lower than the analysts’ expectation of 1.86 million additions.

Focus on international markets for subscribers

Netflix is facing weakness in its domestic market. Therefore, the company is spending more on the international front, especially in the growing markets of India (INDA), Mexico, Italy, Spain, Germany, France, Brazil (EWZ), Turkey, and throughout the Middle East.

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