Netflix inventory dips as a consequence of a dramatic slowdown in subscriber addition

The video-streaming platform Netflix noticed its shares fall as a lot as 11% in after-hours buying and selling yesterday after reporting solely 3.98 million new world subscribers final quarter, a far cry from the 6.2 million additions anticipated by Wall Street analysts. The firm additionally stated that it expects only one million new subscribers over the following quarter.
Netflix has blamed this slowdown in subscribers on the Coronavirus pandemic, attributing the manufacturing delays of its big-ticket films and TV exhibits 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,” stated Netflix in a letter to its shareholders.
Analysts imagine that Netflix is going through growing competitors within the video streaming market, particularly within 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. However, the corporate has denied this consider its report, saying that it doesn’t imagine competitors performed an element within 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,” stated Netflix.
The streaming large expects to bounce again within the second half of 2021, with content material delayed as a consequence of 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 corporate added.
The firm stated that manufacturing has resumed and operating in practically all of its main markets. Netflix stated that it expects to spend greater than $17 billion in money on content material this yr.