Netflix’s user growth slowed for the first time in several years in 2019, the company has revealed, as it said that the launch of rival streaming services may have affected subscriber numbers.
The US internet video company said it had signed up 8.76m new households in the final three months of the year, a slight decrease on the year before, meaning memberships grew by 27.8m last year.
Although the rise beat Netflix’s previous estimates, it meant that it added fewer users in 2019 than in the prior year, the first time growth has declined in several years.
Netflix admitted that the recent launches of Disney Plus and Apple TV Plus, the two companies’ own streaming services, had stunted its growth, particularly in North America, where Disney’s offering was released towards the end of last year.
While it said it saw record growth in other geographies, it signed up 550,000 new users in the US and Canada, down from 1.75m a year ago, which it put down to price changes and “competitive launches”.
The company insisted it could withstand the competition, however, saying its subscribers were watching more hours of Netflix even in the US.
The company’s revenues grew by 31pc to $5.5bn (£4.2bn) in the fourth quarter, partly driven by price increases, while profits rose to $587m. However, it burned through $1.7bn in cash due to heavy investments in original content.
The introduction of Disney Plus and Apple TV Plus, which were launched in November, as well as forthcoming streaming services from HBO and NBC, are seen as the biggest challenge to Netflix since the company switched from a DVD-by-post company to a video streaming service.
Both Disney and Apple undercut the company on price in the US, while others have acquired some of Netflix’s most popular shows.
Shares were flat in late trading. Netflix said it expected subscriber numbers to increase by 7m in the first three months of 2020, which would be a slowdown from the 9.6m in the same period last year. The company said this was because many of its most anticipated upcoming shows would not be released until the second quarter of the year.
Disney said yesterday that its streaming service would come to the UK on March 24 and would cost £5.99 a month, matching the cheapest Netflix subscription tier.