Research from CBH Insights cited by CNBC suggests that Netflix subscribers watch an average of 10 hours per week, compared to just five hours on Amazon and Hulu, whereas the National Bureau of Labor Statistics says traditional TV viewers watch almost 20 hours per week.
"In uber growth stories, especially in technology, from Apple to Amazon to Netflix, you're going to run into these one- or two-quarter issues when they're white-knuckle periods in the very near-term", he said. Internationally, the company added 4.47 million new subscribers, short of its guidance for 5 million.
With all this, the stock is tanking.
Netflix added 5.15 million customers from April through June, 1 million fewer than forecasts from Thomson Reuters I/B/E/S and down from 7.41 million in the first quarter.
Wall Street had been betting that Netflix would deliver outsized growth as demand for online entertainment increases around the globe.
Prior to the earnings coming out, Netflix shares were changing hands at around $400 USA apiece.
Image Netflix is facing growing competition from global tech rivals and traditional providers
Netflix also fell short when it came to revenue predictions.
Netflix predicted it will add 5 million subscribers in the current quarter, which ends in September, slightly slower than the pace a year ago.
In a letter to shareholders, Netflix acknowledged the miss: "We had a strong but not stellar Q2", the statement said. "Should Hulu begin to compete effectively for Warner, Fox, Universal, and Disney content, we expect exclusive deals to sharply reduce the amount of content purchased by Netflix, limiting Netflix's ability to raise price [s]".
Looking ahead to the third quarter, the company is calling for $0.68 in EPS on $3.99 billion in revenue.
"Our viewing is setting year-over-year records, the shows that we have coming", he said in a conference call on Monday. It brought in $3.91 billion in Q2 but was expected to earn $3.94 billion.
Netflix said Monday that it expects more competition, but dismissed any potential negative impact on its business. The company plans to spend as much as $13 billion on original content this year, far more than many of its rivals. "Our strategy is to simply keep improving, as we've been doing every year", the company said.More news: Lawmakers call Trump's performance at press conference with Putin 'shameful'