Netflix shares slumped after the streaming video and entertainment company forecast disappointing subscriber growth in the first quarter, warning that more U.S. subscribers have cut the service. In the U.S., Netflix added a weaker-than-expected 420,000 subscribers during the fourth quarter. Growth has slowed in the last year, partly because most people in the U.S. who want Netflix already subscribe.
The pioneer of streaming media and binge-worthy shows faces an increasingly competitive market as Apple, Disney and others launch their own streaming options. Netflix said it expects to add 7 million subscribers during the first three months of this year, well below the 9.6 million subscribers it added in the first quarter last year. Netflix CEO Reed Hastings said he believes rivals are mostly capturing new viewers who are transitioning from traditional TV watching.