Netflix makes fewer new subscribers than expected and the stock collapses on the stock exchange
The giants of video streaming are struggling to add new subscribers after the surge for the pandemic. Netflix is one of them: it presented its report for the last quarter of 2021 communicating a lower number of subscribers than expected, highlighting the difficulties in attracting new users also due to increasingly intensified competition.
Netflix said it added 8.28 million subscribers in the three months ended December 31. In this case analysts on average had predicted additions of 8.39 million. This caused investors to falter and the value of the company’s shares fell by 10% in after-market trading. The great boost to subscribers that occurred with the pandemic is fading: users are tired of staying at home and moreover in many areas of the world cinemas have reopened.
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Numbers in hand: Netflix had predicted last quarter that it would register 222.06 million paid subscriptions by the end of last year. The company reported that it closed the fourth quarter with 221.84 paid enrollments. A minor difference but not for investors who are instead worried about the fact that Netflix, already one of the largest streaming companies in circulation, may find it difficult to continue to grow. And the next quarter does not look rosy with Netflix’s estimates that ensure growth yes, but still low.
Revenue still grew 16% year-over-year and paid subscriptions increased 9% compared to last year. But while Netflix is still growing, its growth is somewhat less incremental than in the past. And according to investors, both subscriptions and revenue growth were the weak points, particularly in the United States, the company’s largest market, for this last quarter.
“Although further competition may partly affect our marginal growth, we continue to grow in every country and region where these new streaming alternatives have been launched,” the company wrote. “This reinforces our view that the biggest opportunity in entertainment is the transition from linear to streaming and that with less than 10% of total TV screen time in the U.S, our largest market, Netflix has huge room for growth by continuing to improve our service.”