Netflix earnings forecast disappoints investors, shares tumble

Netflix is facing competition from all corners of the entertainment industry, from traditional media companies such as Walt Disney to YouTube, a growing presence in living rooms, and mobile viewing on apps such as TikTok.

Prior to the earnings report, the streaming giant had shed over a fifth of its value as investors worried about how the company would boost revenue and gain new customers. In April, Netflix said it had more than 325 million paying members and still had room to increase that number.

The company is building an advertising business and offering video games, two initiatives still in the early stages. It repeated an earlier forecast that ad revenue would reach $3 billion by the end of the year. The company is counting on its growing number of live events, including an expanded NFL slate, to draw more advertising dollars.