SAN RAMON, Calif. (AP) — The city of San Ramon, California, has declared a state of emergency. Netflix reported dismal subscriber growth in the final three months of last year, a pattern that management expects to continue into the new year as tighter competition undercuts the video streaming leader.
During the October-December quarter, the Los Gatos, California-based corporation added 8.3 million worldwide customers, roughly 200,000 fewer than management had predicted. In addition to reporting fourth-quarter earnings on Thursday, Netflix forecasted a 2.5 million subscriber rise in the first three months of this year, significantly behind analysts’ projections of a 4 million increase, according to FactSet Research.
The dismal news prompted Netflix’s stock price to fall by almost 20% in extended trade after the statistics were released, continuing a severe loss over the previous two months.
Netflix stated in a letter to shareholders that subscriber growth rates had “not yet reaccelerated to pre-Covid levels.” The businesses cited an “ongoing COVID overhang” as one of the causes, as well as economic challenges in numerous regions of the world, notably Latin America.
During the company’s video call to assess its performance, Netflix Chairman and Co-Chief Executive Reed Hastings commented, “Covid has created so much noise.” He downplayed the near-miss in subscriber growth, while Ted Sarandos, co-CEO and content head, stated that the business saw no decreases in engagement or customer retention.
The company’s tariffs were last hiked in October 2020, and its subscriber base has continued to expand. Analysts predict that the price rise will result in more cancellations than usual but higher revenue this time.
“I believe they have the authority to accept this price hike,” Ms. Barshay stated. At $15.49, they’re only 49 cents more than HBO Max. There’s no reason why they shouldn’t be in charge. Their top-end quality is on par with anyone’s, and their quantity just outdoes everyone. “
Netflix stated that one of the reasons for its lower first-quarter prediction was that several new releases were slated for the end of the quarter. It was announced that the second season of “Bridgerton” and “The Adam Project,” a film starring Ryan Reynolds, will both premiere at the conclusion of the first quarter of March.
The fourth-quarter growth was fuelled by strong content at the end of 2021. According to Netflix, films like “Red Notice” and “Don’t Look Up” were the most-watched movies in the company’s history, and returning shows like “Cobra Kai” and “The Witcher” drew audiences as well. The “Squid Game,” which was published at the end of the third quarter, achieved global success in the fourth quarter.
Ted Sarandos, Netflix’s other co-CEO, was more upbeat about the company.
“What’s truly fantastic about 2021, despite all of those conditions, is that we were able to verify two theses that we gambled on years ago,” he added. “One significant one is our commitment to foreign programming.”
He said, “And we were wagering that you could take films and series from anyplace in the world and enjoy the entire world,” referring to shows such as “Squid Game,” “Call My Agent,” and “La Casa de Papel.”
Recognize This ‘Squid Game’ Voice? Behind Netflix’s Global Dubbing Strategy | WSJ
Updated on January 21, 2022 : This story was published at an earlier date and has been updated with new information.