Netflix accumulates fewer new subscribers than expected

Spread the love

The Bridgertons and the Lupines have not saved the day for Netflix, which has seen its paid subscriber base growth slow. Netflix ended the first quarter of 2021 with nearly 208 million paying subscribers worldwide (+ 14%), or 2 million less than what the video streaming giant had promised investors.

The sanction was immediate: its title lost more than 10% during electronic exchanges after the close of the Stock Exchange.

Read also: Netflix’s surprising strategy to keep growing

“We believe that the growth of our paid subscriber base has slowed due to the 2020 breakthrough related to Covid-19 and also because of a smaller content offering in the first half of this year, due to delays production due to the pandemic ”, explained the Californian group in a press release. “We ended 2020 with more subscribers and income than we would have had” without the health crisis.

Netflix is ​​not afraid of competition

At the start of the year, growth was at a good pace, notably thanks to the success of modern fictional adaptations such as The Bridgertons Chronicle or the French series Lupine. In January, Netflix announced that the British sentimental plot The Bridgertons Chronicle had been seen by 82 million households in four weeks, a record. But the momentum then faltered, and the platform is only counting on 1 million additional subscribers for the current quarter, against 10 million last year at the same period.

“This is a source of concern because Disney +, Hulu, HBO Max and others are catching up with them in terms of US subscribers,” comments Eric Haggstrom, analyst at eMarketer. “This means that Netflix is ​​arguably close to saturation in the United States, its biggest market.”

Read more: Disney + increases its price and attacks Netflix head-on

This refresh “shows that the world is getting back to normal a bit, at the expense of Netflix,” tweeted Gene Munster of the Loup Ventures investment fund. In the long term, he envisions “almost flat” growth for the pioneer of the sector.

“We’ve had ten years of smooth growth, it’s just a little wobbly right now,” Reed Hastings, founder and boss of Netflix, told an analysts conference. “We wondered if it was not because of the competition, (…) but we looked closely at the data in the regions where there are new competitors and it does not make a difference for us. terms of relative growth. ” He also reiterated that the main rivals of the platform according to him remain the so-called “linear” television, traditional, followed by YouTube.

New content for a rebound

Netflix nevertheless hopes for a rebound from the summer, in particular thanks to the return of very popular series like Sex education or The money heist in the second half of the year, and also thanks to the resumption of filming, thanks to the vaccination campaigns against Covid-19.

“We are safely producing again in most major markets except Brazil and India,” the company explains. “If this continues, we’ll spend over $ 17 billion on content this year, and we’ll continue to offer an incredible variety of titles with even more original productions than last year.”

The platform has the means: its revenue jumped 24% to over $ 7 billion in the first quarter and its net profit, $ 1.7 billion, is well above expectations and more than double that of yesterday. a year.

The blog post: The Golden Age of Netflix

But despite this increase, “Netflix’s market share in terms of revenue from streaming subscriptions is declining,” eMarketer noted in a statement. “They had 49.4% of the US total in 2018, against 30.8% expected by the end of the year.”