Netflix Responds To The News Of HBO’s Streaming Subscription, Netflix has enjoyed a virtual monopoly on streaming video — a third of all U.S. Internet traffic is comprised of people watching video on Netflix. But as two major networks announce they are launching standalone online services, the popular video streaming company seems to be treading water in an effort to calm customers and investors. Almost as soon as CEO Reed Hastings released a letter to investors Wednesday, Netflix’s stocks took a nose dive in response to HBO’s announcement of its new streaming service that’s primed to be the company’s biggest competitor. HBO announced Wednesday it would launch a standalone HBO Go subscription in 2015 for the approximately 80 million people in the United States who don’t subscribe to the channel.
Netflix CEO reassured customers that HBO’s plan to offer a cable-free way for customers to watch the network wasn’t going to keep the company down. But news of HBO’s new endeavor seemed enough to scare investors along with reports of stagnant customer growth. Netflix’s stock dropped more than 23 percent Wednesday, down to $331 a share, in after hours stock trading.
The company also reported disappointing growth in the third quarter, when the company failed to attract new customers, but still managed to almost double its revenue compared to 2013. “This quarter we over-forecasted membership growth,” Netflix wrote in its letter to investors. The company boasted nearly $59 million compared to $32 million this time last year. SEE MORE ON PAGE 2