Netflix Shares Plunged 20% After News of Slowing Subscriber Growth
Citing increased competition from other streamers as a major factor.
Netflix has officially reported its Q4 earnings for 2021.
While the streaming giant has been able to increase its earnings per share in Q4 to $1.33 USD versus $.19 USD a year ago, it was not enough to maintain a steady share growth. Netflix’s shares plummetted more than 20% in after-hours trading after news of slowing subscribers. This marks the lowest levels the shares have been since June 2020. The global paid net subscriber additions were 8.28 million versus the predicted 8.19 million. While Netflix did surpass expectations, the number is still fewer than the 8.5 million subscribers Netflix added in Q4 of 2020.
Netflix expects to add 2.5 million subscribers in Q1 of 2022, which falls way below the 3.98 million it added in Q1 2021. With a lower benchmark, it lowers the confidence of many stakeholders. Analysts on the other hand expect Netflix to add 6.93 million subscribers in Q1 of 2022. Q4 2021 saw Emily in Paris, Don’t Look Up, Red Notice and You as its highest performing content.
The streaming giant cites growing competition from other companies including, Apple TV+, Disney+, HBO Max and other as a direct effect in the company’s poor results. Netflix said,
“Consumers have always had many choices when it comes to their entertainment time – competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering.
While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched.””
Netflix recently announced price increases for American and Canadian subscribers.
In other Netflix news, the streaming giant is releasing 25 Korean originals in 2022.
