Netflix on Thursday reported cooling subscriber growth as fierce competition and the pandemic weigh heavy despite hits like “Squid Game” and “Money Heist.”
The streaming service ended the year with 221.8 million subscribers, just below target, after booming during coronavirus lockdowns that kept people at home and on the platform.
The market punishment was immediate, with shares of the California streaming giant losing some 20 percent in after-hours trading.
“While retention and engagement remain healthy, acquisition growth has not yet re-accelerated to pre-Covid levels,” Netflix reported.
Most of the 8.3 million subscriptions added at the end of last year came from outside North America, according to the streaming service.
Fierce competition
“Apple TV+, Disney+, and HBO Max account for virtually all of Netflix’s losses in global demand share for original content over the last two years,” they said.
Analyst Rob Enderle said the markets are already a bit jittery at the moment with concerns over inflation and geopolitical tensions with China and Russia — and competition is fierce.
“When people are having trouble affording gas and groceries, it is going to be hard for them to justify another streaming service,” Enderle added.
Netflix confirmed a second season was coming, but did not give exact timing.
Facebook recently announced subscription price bumps in the United States, with the basic option now costing $9.99, and the most expensive going up to $19.99.
“Film is incredibly important for our members, which is why our ambition has always been to work with the world’s best filmmakers and stars to create a wide variety of quality movies,” Netflix said in the letter.
The company reported a net income of $607 million in the fourth quarter on revenue that grew to $7.7 billion.