A far cry from the 6.2 million additions expected by Wall Street analysts as the video-streaming platform Netflix saw its shares fall as much as 11% in after-hours trading yesterday after reporting only 3.98 million new global subscribers last quarter. The company also said that it anticipates only 1 million new subscribers over the next quarter.
Netflix has accused this slowdown in subscribers on the Coronavirus pandemic, blaming the production delays of its big-ticket movies and TV shows to COVID-19.
“We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays,” said Netflix in a letter to its shareholders.
Investigators believe that Netflix is facing rising competition in the video streaming market, especially in the U.S., with Disney’s Disney+ and Hulu, AT&T’s HBO Max, Apple TV+, Amazon Prime, and Comcast NBCUniversal’s Peacock all competing for subscribers. Still, the company has refused this factor in its report, saying that it doesn’t believe competition played a factor in the below-par subscriber numbers.
“We don’t believe competitive intensity materially changed in the quarter or was a material factor in the variance as the over-forecast was across all of our regions,” said Netflix.
In the second half of 2021, the streaming giant anticipates bouncing back, with content paused due to Covid-19 delays slated to return.
“As we’ve noted previously, the production delays from Covid-19 in 2020 will lead to a 2021 slate that is more heavily second-half weighted with a large number of returning franchises,” the company added.
The company said that production has renewed and run in nearly all of its major markets. Netflix said that it expects to spend more than $17 billion in cash on content this year.
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