Netflix Inc. reported its first net loss since 2005 in the first quarter, leading to a fall in share prices that many analysts blame on a sparse selection of streamed content that suffers by comparison to its growing number of competitors.
Canada provided one bright spot. Netflix chief executive Reed Hastings and chief financial officer David Wells said Canada will reach profitability earlier than expected, delivering a small profit in the current quarter.
Basically, the pioneering service no longer has the field pretty much to itself. Amazon and Hulu are among those offering original content, and YouTube, AOL and Yahoo are making strides to be viable alternatives for on-demand entertainment. And despite putting a brave face on it, Netflix is suffering from losing its licensing deals with Starz that enabled it to offer movies from Sony and Disney.
Netflix told investors it will add at most 800,000 new streaming customers in Q2, but prepared them for as few as 200,000. The company also reported a net loss of $5 million on revenue of $870 million in the first three months of 2012, compared with a profit of $68 million on $789 million in revenue during the same period last year.
Netflix – investor release [PDF]
Thomson Reuters – transcript of earnings call [PDF]
Los Angeles Times – Netflix posts first loss since 2005, shares plunge
The Guardian [U.K.] – Netflix non-US losses hit $100m but subscribers increase