Netflix has expanded its reach around the globe, but Wall Street is more concerned about its slowing growth at home.
Netflix reports its first quarter earnings after the bell on Monday. Last quarter, the company forecasted that it would cross 80 million subscribers in the first quarter of 2016.
The projected growth of new subscribers is expected to largely come from overseas, but the 1.7 million subscribers that Netflix expects to add in the U.S. would be the smallest first quarter U.S. subscriber growth since 2012.
This unease on Wall Street sent Netflix’s stock down more than 4% midday on Monday.
“The question that investors have is given the significant ramp up in programming expense, meaning they are creating a tremendously greater number of original series year over year, are they able to sustain continued and meaningful U.S. subscriber growth?” said Richard Greenfield, internet and media analyst at BTIG.
Besides the U.S. subscription growth, many will be focused on Netflix’s guidance for next quarter.
It could be affected by the company’s $2 monthly fee price hike for long-time subscribers that takes effect starting next month.
This market is concerned that the hike may hurt the company’s already somewhat sluggish company’s U.S. subscriber growth.
“As they raise the price to help pay for all of this programming, what will that do to the pace of subscriber adds?” Greenfield added.
And if an upcoming price hike wasn’t enough to rattle Netflix’s cage, an old competitor directly challenged the company on the eve of its earnings.
Amazon announced Sunday night that its monthly subscription option for its bundle of Prime services like free shipping and original content would include a monthly subscription option.
Up until this point, Prime service has been only available as a $99 annual subscription. It will now have Prime Video, a stand alone service for its movie and TV collection, that will cost $8.99 a month.