Netflix market value plummets as it predicts slowdown in subscribers | netflix
Netflix’s market value fell nearly a fifth after forecasting a dramatic slowdown in subscriber growth in the first quarter as the pandemic-fueled streaming boom wanes and competition from new rivals such as Disney+ is increasing.
Netflix expects to add just 2.5 million new subscribers worldwide in the first three months of the year, well below the 4 million new signups in Q1 2021, and nearly half the number expected by the analysts.
Shares of the streaming company fell nearly 20%, or nearly $45 billion, as investors fretted over the unexpected slowdown in growth.
“While retention and engagement remain healthy, growth in acquisitions has yet to accelerate to pre-Covid levels,” Netflix said, pointing to “Covid overhang and macro headwinds” in parts of the world. world like Latin America.
Netflix added 8.3 million new subscribers in the final quarter of last year, with hits such as Leonardo DiCaprio and Jennifer Lawrence’s Don’t Look Up and Squid Game largely in line with analysts’ expectations.
Overall, Netflix added 18.2 million new subscribers last year, half the number it gained in 2020 when the pandemic fueled a streaming boom as audiences sought to mitigate the boredom during closings.
Netflix has admitted that the streaming war against rivals such as Disney, Apple, HBO Max, Peacock and Amazon, which announced details of its mega-budget Lord of the Rings TV adaptation on Wednesday, is intensifying but that it continues to grow in all territories.
“Consumers have always had plenty of choice when it comes to their entertainment time – competition that has only intensified in the past 24 months as entertainment companies around the world develop their own streaming,” the company said.
“While this additional competition may affect our marginal growth, we continue to grow in every country and region in which these new streaming alternatives have launched.”
Last year, Netflix added the lowest number of subscribers in the UK since its launch in 2012.
Netflix highlighted a number of big releases, including Ozark, Bridgerton and Stranger Things, later in the first quarter that it expects to bring back to stronger growth.