Netflix added 9.6 million subscribers during the first three months of 2019 -- its largest ever quarterly gain in viewers -- but warned investors on Tuesday that its white-hot growth rate could soon cool off. The price of Netflix shares tumbled more than 3 percent on the news.
The streaming company expects to add just 5 million subscribers globally next quarter, down 8 percent from the 5.45 million it added during the same period a year earlier, the company said in a letter to shareholders Tuesday.
Still, the television and streaming service reached nearly 148.9 million total paid subscribers with the new additions in the first quarter, up from almost 139.3 million at the end of 2018. Netflix said it employed the same strategy it has always followed to achieve record growth: "When we please our members, they watch more and we grow more."
But the company is less optimistic about growth for the second quarter. Netflix this month implemented price hikes in most of the countries in which it operates, testing customer loyalty, particularly as new services enter the streaming business at bargain prices. Disney last week announced its foray into streaming with Disney Plus -- whose content Netflix will no longer have access to -- for just $6.99 per month.
Netflix still licenses shows like "Grey's Anatomy" from other studios and has also ramped up investments in its own programming to produce series like "Stranger Things."
The company said it expects highly-anticipated films, including Martin Scorsese's "The Irishman" and Michael Bay's "6 Underground," to replace any subscribers it loses to price hikes.