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Netflix subscriber rebound watched

Netflix has some convincing to do as heavy competition waits in the wings

Rivals are set to swarm over Netflix’s patch, though with Disney+, the new streaming entrant, launching on 12th November, the quarter was spared direct pressure from major competition. Netflix reports third quarter results tonight at 21.00 BST.

Meanwhile, a more impressive line-up than in Q2 should help streaming subscriber growth rebound, overall. International subscriber growth is forecast to accelerate by 24% year-on-year, or 6.92 million, but U.S. subscriber growth is seen declining by 21%, as the group is expected to report just 859,000 additional U.S. viewers.

Adjusted EPS forecast: +20.3% to $1.24. Revenue forecast: +31% to $5.25bn.

Netflix will not only have to exceed its guidance around 7 million subscriber additions but also deliver a healthy 4Q forecast to ease concerns that arose after weak 2Q results. Questions about the business model abound, given looming competition. A strong slate including "Stranger Things" should have helped subscriptions in 3Q, but investors will be most curious about how the company plans to fend off a new crop of rivals prepared to pour vast sums of money into content. Subscriber guidance for 4Q is critical, given the November launches of Apple TV+ and Disney+.


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