Netflix fights to reverse subscriber slowdown
NETFLIX pulled in just 1.54m new subscribers over the spring as the easing of lockdown restrictions hit demand for television streaming services.
The US giant – whose shows include Stranger Things, The Crown and Shtisel – is still gaining paying customers but at a far slower rate than last year.
The increase in subscribers between April and June compared with a jump of 10.09m in the same period last year when lockdowns boosted business.
Although analysts had expected a slowdown, they had forecast 1.75m new customers to open a Netflix account in the second quarter of this year, according to FactSet – though Netflix itself had guided to just 1m.
The company’s revenues were up 19.4pc over the period to £5.4bn – a more moderate rise than the 24.9pc growth it achieved a year ago.
And Netflix advised shareholders that its revenue growth would continue to tail off, predicting sales would rise by just 16.2pc in the third quarter.
But profit was up to £991m from £528m a year ago.’ Analysts said the slowdown was the first sign of the ‘pandemic effect’ on streaming services beginning to cool off. Netflix’s big lead over rival services has also prompted suggestions it is reaching ‘saturation point’ in markets such as the US. That has led bosses to look for new ways to bring in revenue.
So far their efforts include an online shop launched last month, which sells clothing and toys linked to popular shows including The Witcher and Stranger Things.
But on top of this, Netflix is also looking at potential video games. These would build on 2018’s Black Mirror: Bandersnatch, a show that allowed viewers to affect the story by making choices for the main character.
Analysts remain sceptical about whether its push into games will be successful in the face of competition from established players such as Nintendo, Sony and Microsoft.