The streaming service added just 3.98 million subscribers in the first quarter, and Wall Street’s estimate of 6.29 million is missing.
The loosening of pandemic security demands the growth of Netflix Inc., as expected, much heavier, and its shares plunged to 13% on Tuesday.
The streaming service added just 3.98 million subscribers in the first quarter, missing Wall Street’s estimate of 6.29 million and its own forecast of 6 million. The current quarter will be even more challenging, with Netflix predicting 1 million new customers – a fraction of the 4.44 million forecast by analysts.
Netflix has been warning for months that growth will slow after customers came out of Covid’s hibernation, but few expected it to stagnate so dramatically. The first quarter of 2020 was the strongest in company history, with 15.8 million new customers, and Netflix’s pace was still surprisingly fast in the fourth quarter.
The last three months, on the other hand, were the slowest first quarter since 2013, when Netflix added about 3 million customers.
A lack of new performances can also contribute to the slump. The company’s production slowed in the first quarter due to the pandemic, which led to production delays. Netflix was able to sustain its release schedule for the first few months of Covid closures because it had already completed many shows. But films and programs that were supposed to be in production last March, April and May had to stop, leading to the current shortage.
All this coincided with the intensification of competition in streaming, from Disney +, HBO Max and Apple TV + to newer entrants such as Discovery + and Paramount +. Some are cheaper than Netflix, which raised U.S. prices in October.
Europe remains a bright spot for Netflix. The streaming service added 1.81 million customers in Europe, the Middle East and Africa, leading the company. ‘Lupine’, a French heist thriller, was the most popular new series of the quarter.
Netflix dropped to $ 480 in extended trading, which would be a 2021 minimum. The stock rose 1.6% this year to the end of Tuesday in New York.