Netflix's Streaming Growth Slows

Shares fall as much as 17% in after-hours trading

By Todd Spangler, Multichannel News -- Broadcasting & Cable, 10/23/2012 5:01:37 PM

Netflix added 1.16 million net streaming subscribers in the U.S. for the third quarter of 2012 -- at the low end of its expectations -- and the company said it will miss its target of adding 7 million subs for the full year.

After the earnings were released, Netflix shares fell as much as 17% in after-hours trading. Prior to the earnings announcement, Netflix shares closed up 0.5%, to $68.22 per share Tuesday.

"While we are not growing membership as fast as in 2010, we think that over time nearly all U.S. households will be broadband households, nearly all video will be Internet video, and that as our content and member experience continue to improve faster than competitors, our long-term domestic market opportunity remains 2-3x that of linear HBO," CEO Reed Hastings and CFO David Wells said in a letter to shareholders.

At the end of September, Netflix had 25.1 million domestic streaming customers and 4.3 million non-U.S. streaming subs (after adding a net 690,000 in the period).

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