Netflix misses subs target by two million

Docuseries Tiger King helped Netflix far exceed its forecast subs last year

Global SVoD giant Netflix attracted two million fewer subscribers than it projected for the first three months of the year.

The streamer had expected to add six million new subscribers in the first quarter of 2021, but instead it has been revealed that four million new users signed up.

Netflix has attributed the slowdown in subscribers to having less new content than expected because of production delays caused by the coronavirus pandemic and to the surge in new members in 2020.

In a letter to shareholders, Netflix wrote: “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.

“We continue to anticipate a strong second half with the return of new seasons of some of our biggest hits and an exciting film lineup. In the short-term, there is some uncertainty from Covid-19; in the long-term, the rise of streaming to replace linear TV around the world is the clear trend in entertainment.”

As a result of the figures, Netflix’s share price dropped 11%. Revenues, however, were in line with expectations and grew 24% year-on-year.

The news comes after Netflix enjoyed a boom in subscribers for the same period last year. In Q1 2020, 15.77 million new subscribers signed up to the platform – more than double its projected seven million new users.

Lockdowns around the world and the launch of Netflix originals such as docuseries Tiger King: Murder, Mayhem & Madness and relationship format Love is Blind were thought to be responsible for the gains.

However, subscriber numbers began dropping off between July and September last year, with Netflix adding 2.2 million users, just short of the 2.5 million it expected.

The company subsequently warned that the decline in subscription rates could continue in 2021. It is also now facing stiff competition from new streamers such as Disney+, which already has 100 million subscribers, compared with Netflix’s 207.6 million.

Paolo Pescatore of tech, media and telco analyst PP Foresight said the latest figures represented “a huge miss on net adds which is far worse than expected,” adding: “This, coupled with further low net adds for the subsequent quarter, suggests that the pandemic streaming party has firmly come to an end.

“As important as subs is net income. Netflix is at a different phase of growth compared to other streamers. The year ahead will be pivotal in being more self-sufficient than dependent on other financial sources. It will be many years before many other streaming services turn a profit. All are placing huge bets and will be loss leaders for years.”

In related news, Netflix revealed yesterday that it had commissioned a new drama series called Florida Man, in which Edgar Ramírez (Yes Day) will play an ex-cop forced to return to his home state of Florida to find a mobster’s runaway girlfriend. The eight-part show is from TV writer/producer Donald Todd (This is Us) and Jason Bateman and Michael Costigan’s prodco Aggregate Films.