Netflix, the streaming video giant, showed a rare moment of weakness last quarter when it reported that it lost domestic subscribers for the first time since starting its digital television service 12 years ago.

It was an unhealthy sign in the face of looming rivals, but the internet juggernaut has another chance today to build confidence when it announces its third-quarter results after the market closes. The subscriber marks will be closely eyed by Wall Street investors, who have traded down Netflix shares about 20 percent since its last earnings report.

Analysts expect Netflix to add seven million new customers for the third quarter, including about 800,000 in the United States. If that holds true, it would be a much-needed improvement over the previous period when the company lost 126,000 paid users domestically. Investors are looking for roughly $470 million of income on $5.2 billion in sales.

The quarter will likely have benefited from Netflix’s best-known series, “Stranger Things,” which debuted its hugely anticipated third season over the Fourth of July weekend.

Netflix, which started as a DVD-by-mail service, has become a dominant force in Hollywood, and its disruptive growth has reordered the television landscape. It often outspends its rivals and has forced the industry’s biggest players to embrace streaming as they abandon, albeit slowly, the pay-television model.

Netflix is the nation’s largest digital television network with over 151 million customers around the world, including 60 million in the United States.

That audience has become critically important as well-financed competitors wait in the wings. On Nov. 1, the tech behemoth Apple plans to unveil its streaming product, Apple TV Plus; 11 days later, The Walt Disney Company intends to launch Disney Plus, which will feature Marvel’s biggest franchises, the complete “Star Wars” library and the Disney content vault.

In a cheeky marketing stunt, Disney owned Twitter for a few hours on Monday when it promoted its service on an epic Twitter thread with a seemingly endless string of titles (both famous and obscure) that will appear on Plus. Not to be outdone, Jennifer Aniston, who stars in Apple’s new signature series “The Morning Show,” drew Instagram’s attention Tuesday when she finally joined the social platform.

Both streamers will come stocked with original films and series, and both will cost about half the price of Netflix. (By early next year, Netflix will face another competitor: AT&T’s HBO Max.)

That suggests that the more important consideration in its financial report is Netflix’s expectation for the current quarter, when it will come up against the biggest competitive threats it has ever faced as a streaming service.

The fourth quarter is also traditionally Netflix’s most lucrative period when it adds the most subscribers. Wall Street analysts estimate that the company will add about 9.4 million customers, with 1.4 million in the United States. But it’s possible Netflix will forecast slower growth because of the new entrants.

Edmund Lee covers the media industry as it grapples with changes from Silicon Valley. Before joining The Times he was the managing editor at Vox Media’s Recode. @edmundlee

Source: Read Full Article