Netflix's 'Arrested Development' grows subscribers - but not enough
POSTED: Monday, July 22, 2013 - 1:58pm
UPDATED: Monday, July 22, 2013 - 2:01pm
NEW YORK (CNNMoney) -- — Netflix brought "Arrested Development" back to life this spring, and the comedy series helped boost the online video company's subscriber numbers -- just not by enough.
Netflix's video streaming service netted about 630,000 new American subscribers in the second quarter. That's pretty good, considering that Netflix typically expects second-quarter subscriber numbers to sink year-over year. The subscriber additions were also on the high end of Netflix's outlook for the period: In April, Netflix said it expected to gain between 230,000 and 880,000 new domestic subscribers in the quarter.
But Wall Street analysts were more optimistic, expecting Netflix to add about 700,000 subscribers. As a result, shares of Netflix fell by about 6% in after-hours trading on Monday.
That's despite better-than-expected financial results for the quarter. Netflix's second-quarter profit, excluding one-time debt-related charges, came in at 49 cents per share. Analysts polled by Thomson Reuters were expecting earnings of 40 cents per share.
Netflix reported revenue of almost $1.1 billion, in line with expectations.
Fox canceled "Arrested Development" in 2006, but its cult-like following convinced Netflix to create a new, fourth season and release all 15 episodes of "Arrested Development" on May 26. It's part of a larger original-content strategy that also included "House of Cards," "Hemlock Grove," and "Orange is the New Black." Another original series, Ricky Gervais' "Derek" will premier in September.
The company reportedly spent $100 million producing and shooting two seasons of "House of Cards," the first of which was released in February.
Its original content just even received 14 Emmy nominations last week, the first time Internet TV shows have done so, but the new content released in the past quarter did not translate into a huge jump in subscribers. Netflix netted more than 2 million subscribers in the first quarter of this year.
Investors have largely bought into the strategy, as Netflix stock prices have nearly quadrupled over the past 12 months.