Netflix plunges on fears lockdown boost is over
SHARES in Netflix plunged after it warned the boom in subscribers from the coronavirus crisis would not last.
The US video streaming group piled on 10m more paying customers from April to June, taking total additions in the first half of this year to a staggering 26m.
But it forecast that it would only add 2.5m subscribers from July to September, suggesting a boost from the pandemic was running out of steam. Shares fell by as much as 9pc when US stock markets opened yesterday, wiping billions of dollars off its value.
Netflix, whose recent shows include Hollywood, benefited from an influx of customers in recent months, as housebound families sought entertainment during lockdowns.
In its second quarter results, the business said this led to huge growth in the first half of the year, but ‘as a result we expect less growth for the second half of 2020’. The company is also battling fresh competition from Disney Plus that launched earlier this year just as lockdown measures came into effect in many western countries.
With its new members, Netflix remains dominant with nearly 193m paying online customers.
But Fitch Ratings director Patrice Cucinello questioned whether the pandemic gains would last.
‘Do they have to give back some of these subscribers once people aren’t locked in their homes?’ she asked.
New shows launched during the second quarter included Space Force, Too Hot To Handle, a Jerry Seinfeld comedy special and new seasons of Money Heist and Dead To Me.
Netflix also announced that content chief Ted Sarandos would become cochief executive, setting up the 20-year company veteran as a clear successor to founder Reed Hastings. But Hastings insisted he was still committed to the top job and that Sarandos’ promotion was ‘formalising how we run the business today’.