Netflix brushes off streaming threats from Apple, Disney

By: Alexandra S.

Netflix brushed off threats of competition from Apple and Disney on Tuesday even as it predicted its global subscriber base will grow at a slower pace next quarter.

“We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on-demand entertainment is so massive and because of the differing nature of our content offerings,” Netflix boss Reed Hastings told investors during an earnings call.

“We believe there is vast demand for watching great TV and movies and Netflix only satisfies a small portion of that demand,” he said.

Netflix’s dominance in streaming TV and movies has been challenged twice in recent weeks — first by Apple and then Disney. Both companies plan to launch streaming video services later this year to compete with Netflix.

KeyBanc Capital analyst Evan Wingren said he agrees that Netflix is safe — at least for now. “While other services may carve out valuable add-on positions, we do not expect the launch of new services from Apple, Disney, AT&T or others to meaningfully impact Netflix’s subscriber results over the next year,” he said.

Wall Street sent shares of the streaming titan down 1 percent in late trading as the company estimated second-quarter paid subscriber adds of 5 million, down 8 percent over last year.

The disappointing forecast was offset by better-than-expected first-quarter results — thanks to hits like “Fyre: The Greatest Party That Never Happened” and “Russian Doll.”

The company reported income of $344.1 million, up 18.6 percent, on revenue of $4.52 billion, up 22.2 percent from last year.

Netflix added 9.6 million new subscribers in the three months ended in March, above the 8.9 million the company pegged for itself earlier in the year.

The firm expects to add 5 million subscribers globally in the second quarter, down 8 percent year-over-year and less than the 5.5 million subscribers analysts expect.