The broadcast service added just 3.98 million subscribers in the first quarter, and Wall Street’s estimate of 6.29 million was missing.
Relieving pandemic blockages is affecting the growth of Netflix Inc. much more severely than expected, and sent its shares up 13% on Tuesday.
The broadcast service added just 3.98 million subscribers in the first quarter, missing Wall Street’s estimate of 6.29 million and its own forecast of 6 million. The current quarter will be even harder, as Netflix expects one million new customers, a fraction of the 4.44 million projected by analysts.
Netflix has been warning for months that growth would slow after customers came out of Covid hibernation, but few expected it to stop so dramatically. The first quarter of 2020 had been the strongest in the company’s history, with 15.8 million new customers, and Netflix’s pace was still surprisingly fast in the fourth quarter.
In contrast, the last three months were the slowest first quarter since 2013, when Netflix added nearly 3 million customers.
The lack of new shows can also contribute to the fall. The company’s production slowed in the first quarter due to the consequences of the pandemic, which caused production delays. Netflix was able to maintain its release schedule during the first few months of Covid’s blockchain because it had already finished many shows. But the films and programs that were supposed to be in production in late March, April and May had to be stopped, leading to the current deficit.
All of this coincided with a tightening of streaming competition, from Disney +, HBO Max and Apple TV + to new entrants like Discovery + and Paramount +. Some are less expensive than Netflix, which raised its prices in the US in October.
Europe remains a bright spot for Netflix. The transmission service added 1.81 million customers across Europe, the Middle East and Africa, at the helm of the company. “Lupine,” a French thriller, was the new most popular service series of the quarter.
Netflix fell to $ 480 in expanded trading, which would be a 202 low. Shares had risen 1.6 percent this year until Tuesday’s close in New York.