Netflix shares soared on Wednesday following its quarterly report release that highlighted the expected decline in subscriber numbers. The streaming giant's third-quarter earnings also beat analyst expectations, based on the report.
According to CNBC, the stock soared over 10 percent on Wednesday's extended trading session despite mixed results during the third quarter. The biggest snag on the report was the drop in subscriber additions.
On the domestic stage, Netflix only added 517,000 paid subscribers, as opposed to Refintiv's forecast of 802,000. The fall in subscriber figures was attributed to increasing competition at home.
Despite the softening demand at home turf, the international subscriber count jumped from the expected 6.05 million to 6.26 million as more foreign countries explore the streaming service's offers.
In a statement, Netflix expressed confidence in its products. The company acknowledged that TV-based newcomers such as HBO Max, Peacock, Disney+, and Apple TV+ will have an impact on the competition. On the other hand, the provider said the said rivals do not have the renowned diversity and variety that the company offers.
While some Netflix execs have downplayed the effect of new competition coming around during the fourth quarter of this year, others admitted that the arrival of new offers from some popular industry giants will have an effect on the subscriber count.
Fears for a further decline in subscriber figures were made apparent through the company's own projection of Q4 subscriber additions. According to MarketWatch, Wall Street analysts are expecting around 9.6 million additions, while Netflix is only looking at 7.6 million.
Aside from losing some of its key shows such as "The Office" and internationally-acclaimed series "Friends," the competitive threat is starting to cause concern among some industry analysts.
Apple, in particular, is expected to be one of Netflix's biggest rivals. The American tech giant previously said it will set aside $6 billion yearly for the development of original shows - a move that some experts said could be a challenge to go head-to-head with the streaming leader.
Another huge competitor is Disney, as the company is expected to continue offering an option for subscribers to download content so they can watch their favorite shows or movies offline. Disney's Hulu has already started allowing iOS subscribers to try the feature, Motley Fool reported.
Disney has gone on to ban Netflix-related ads from most of its networks including National Geographic, FX, ABC, and Freeform. It remains to be seen if other competitors will follow suit in the long run.
Amid increasing fears for the company's performance during the fourth quarter, Netflix is expected to bounce back in 2020.
