Netflix’s subscriber growth slows after pandemic boom
Netflix Inc said on Tuesday that slower production of TV shows and movies during the pandemic hurt subscriber growth in the first quarter.
Roughly 3.98 million people signed up for Netflix from January through March, below the 6.25 million average projection of analysts surveyed by Refinitiv.
Netflix estimated it would add just one million new streaming customers in the second quarter.
The company said it did not believe competition changed materially in the quarter or impacted its new sign-ups “as the over-forecast was across all of our regions.”
Netflix projected membership growth would accelerate in the second half of the year when it releases new seasons of You, Money Heist, and The Witcher and action
Red Notice, among other titles.
A year ago, Netflix added a record 15.8 million customers as the pandemic forced people around the world to stay home. The company said on Tuesday the pandemic hindered filming new shows.
“These dynamics are also contributing to a lighter content slate in the first half of 2021, and hence, we believe slower membership growth,” Netflix said in its quarterly letter to shareholders.
Analysts project people will spend less time streaming from their living rooms as Covid-19 vaccinations spread and more people emerge from their homes.
Rival media companies have declared streaming their priority and are spending billions to compete with Netflix.
Walt Disney Co’s Disney+ crossed 100 million subscribers in March. Netflix’s total streaming customers stood at 207.6 million at the end of March.
Netflix’s share of new US subscribers fell to 8.5% during the quarter, down from 16.2% the same period a year ago, according to Kantar Media.
During the quarter, Netflix lost one of its most popular titles when workplace comedy The Office moved to Comcast Corp streaming service Peacock.
Netflix also raised its monthly rates in Britain, Germany, Argentina and Japan during the quarter.
New customers totalled 1.8 million in Europe, 1.36 million in Asia and 360,000 in Latin America.
“What wasn’t expected was the strength of the slowdown in international markets, where competition is significantly lower,” said eMarketer analyst Eric Haggstrom.
Excluding items, the company earned $3.75 per share in the first quarter, beating analyst estimates of $2.97 per share.
Revenue rose to $7.16 billion from $5.77 billion during the quarter, edging past estimates of $7.13 billion.
Net income rose to $1.71 billion, or $3.75 per share, from $709 million, or $1.57 per share, a year earlier.