Rege-Jean Page and Phoebe Dynevor star in Netflix’s “Bridgerton.”
Netflix
Investopedia defines a “correction” as a “10% or more drop in the price of a stock, asset, or financial market.”
This was Netflix’s quarterly fix.
Shares fell more than 10% a few hours after Netflix announced it had added just under 4 million subscribers in the first quarter, not taking into account the company’s 6 million forecast. Netflix also said it expected only one million net additions to be paid for the second quarter. To put that in perspective, Netflix added 10 million subscribers in the second quarter of last year.
Netflix benefited from increased demand for its broadcast service in the first six months of the pandemic, which added nearly 26 million subscribers during the first six months of 2020. The company did not see that these profits would come at that time and now he underestimated it. the setback as the pandemic seems to be coming to an end.
Still, there is room for long-term Netflix bulls to remain optimistic. The company says it expects subscriber growth to accelerate in the second half of 2021 as new programs and films that were delayed amid pandemic shutdowns become available. In addition, average revenue per user continues to increase in all regions of the world. The average user in the U.S. and Canada now pays $ 14.25 a month for Netflix, up 9% from a year ago.
Forecasting just one million new subscribers for the next quarter may be a deliberately conservative guide, as Netflix, along with the rest of the world, readjusts to post-pandemic life.
APRU’s international growth and gains will likely be the ones driving Netflix’s shares even further if the company can deliver.
This quarter the rise of the Netflix pandemic returned to earth. If the theme for the second half of the year is to get back to reality, that’s probably good news for Netflix. The reality has been very kind with the company of co-CEO Reed Hastings.
WATCH: CNBC’s Alex Sherman and NYT’s Ed Lee discuss Netflix’s gains