The future doesn't look too hot for the streaming movie service and investors can smell it. Netflix had a surprisingly good third quarter, beating market expectation, but that's where the good news ends. The company reported its Q3 earnings Monday afternoon, reporting higher numbers than expected, explains AllThingsD's Peter Kafka. "A first look at Netflix’s Q3: Revenue of $822 million and earnings $1.16 a share," writes Kafka. "The Street was expecting around $811 million and about $0.94 a share." That sounds like good news for the company after months of missteps, right? Then, why did Netflix's stock fall 16 percent after the announcement? The company's fourth-quarter earnings and revenue forecasts didn't meet Wall Street expectations, reports MarketWatch. And subscription rates are down. Netflix has lost 800,000 subscribers since its price hikes and Qwikster back and forth, according to TechCrunch's Leena Rao. And the company doesn't expect to add too many subscribers in the next few months, continues Kafka. Netflix isn't done with its growing--er, shrinking?--pains quite yet.
The rocky earnings reports is only the latest in bad news for the company, but Netflix is not giving up. Ahead of the earnings news, there were these nuggets of info floating around the business press.
Netflix is actually getting bigger. In early 2012 Netflix will launch its service in the U.K and Ireland, reports The Guardian. This is the company's first move into Europe and comes almost exactly a month after the company opened up shop in Canada. Netflix also recently expanded to Latin America and the Caribbean.
It's streaming offerings are expanding, too. A big blow to Netflix's cred came when it announced its break-up with Starz. Netflix advertises that Starz Play provides over 1000 titles to subscribers. Come February Netflix will lose rights to those premium offerings, including the Sony and Disney favorites, such as Pixar favorites like Toy Story 3. Since it lost these titles, however, Netflix hasn't sat down whining about it. It has announced new partners on a regular basis, including the CW, Discovery, more AMC shows and an exclusive DreamWorks deal. Admittedly, some offerings just aren't as good as Toy Story 3, but the lineup includes AMC hits like The Walking Dead and CW guilty pleasures like Gossip Girl.
Netflix CEO Reed Hastings is cleaning up the big PR mess. Hastings has publicly apologized twice. Price hikes and the separation of the streaming and mail-order DVD services pissed customers off. A tanking stock and fleeing customers prompted Hasting to make his first public apology. "I messed up. I owe everyone an explanation," wrote Hastings on the Netflix blog. That didn't really help too much, but Hastings has showed persistence. Not only did he admit he was wrong, reuniting the DVD and streaming arms, but he has since made another public apology. "I think it was just a mistake in underestimating the depth of emotional attachment to Netflix," he told New York Times Magazine's Andrew Goldman in this week's magazine.
This article is from the archive of our partner The Wire.
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