The first quarter of the current year saw Netflix losing out on subscriber growth at a time when the vaccinations are ramping up even while the online video streaming company had seen a huge growth in the first quarter last year when people were forced ot stay back home during the Covid-19 pandemic.
After reporting an addition of 4 million subscribers in the first quarter of 2021, the company now claimed to have a total of 208 million subscribers globally. However that was short of the company’s own projection of 201 million subscribers.
The profit for the first quarter was at $1.7 billion compared to $709 million reported by the company for the same period a year ago. Netflix also reported a 24 per cent jump in its revenues at $7.1 billion in the quarter. Hence even though the earning of the company was good, the industry was keen about it missing its subscriber target. The company also made a weak forecast for subscriber growth for the next quarter.
The results caused a 11 per cent drop in the shares of the company.
The performance of the company was so food last year that $709 million, according to Netflix.
“We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020,” Netflix said in its letter to investors on Tuesday.
Compared to the growth in subscriber base in the first quarter of last year, its addition of just 4 million subscribers appeared to be miniscule. The company had added 16 million new subscribers in the first quarter of last year with people being forced to stay back at home because of the pandemic induced restrictions resulting in consumers choosing to get entertained at home through online streaming services such as those of Netflix.
The company noted that “a lighter content slate in the first half of this year, due to Covid-19 production delays” also played a part in the sluggish subscriber growth.
Even though it released popular series like “Bridgerton”, there have not been some hits lately. Despite this the streaming service said that production delays because of the pandemic in 2020 will “lead to a 2021 slate that is more heavily second half weighted with a large number of returning franchises.”
The company plans to spend more than $17 billion on content in 2021 with production returning to normal around the world, the service said.
“We continue to anticipate a strong second half with the return of new seasons of some of our biggest hits and an exciting film lineup,” the company said. “In the short-term, there is some uncertainty from Covid-19; in the long-term, the rise of streaming to replace linear TV around the world is the clear trend in entertainment.”
The company said that it rivals with “many activities for consumers’ entertainment time” which ranges from consumers watching TV to playing video games. And yet the market is big enough for it to keep growing, believes Netflix.
“More and more new streaming services are launching, reinforcing our vision that linear TV will slowly give way to streaming entertainment,” Netflix said. “Despite our 10+ year head start, we are continually seeking operational and creative excellence; we’re working as hard as ever to continually improve our service so that we are the best entertainment option available.”
(Adapted from CNN.com)