Netflix misses its growth targets and its shares plummet

The actions of Netflix had a 20% drop, a collapse that responds to uncertain forecasts about the growth of its subscriber base. platform streaming of movies and series has 221.8 million users who pay for the service. In the last quarter of last year it added 8.3 million, a figure that is below its preliminary expectations.

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“Investors have been concerned that the company is not adding subscribers fast enough, and today they started to panic”, points gadget about. The drop was the most important since June 2020.

Netflix misses its growth targets and its shares plummet

In addition, Netflix predicted that after the first three months of the current year it will have 224.3 million subscribers, a growth of just 2.5 million, a forecast that has disappointed analysts. Earnings in the fourth quarter were $607 million, compared to $542 million in the same period a year earlier. In addition, the company’s revenues increased by 16%, reaching 7.7 billion dollars.

Netflix acknowledges that its slowdown is due to increased competition in the streaming business. streaming

In a letter to investors, from Netflix they recognized the influence of competition, which has intensified in the sector with the emergence of new platforms. This “may be affecting our marginal growth.” The reference is to platforms such as Disney + and HBO Max, among others, in addition to others already present such as Amazon Prime Video, Apple TV, Paramount Plus and Star Plus.

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In that order, they noted that while user retention is maintained, growth in the subscriber base “has not yet accelerated back to pre-Covid-19 levels”. The company headquartered in Los Gatos, California, attributed its present to the economic difficulties in various countries around the world, largely as a result of the new wave of infections.

They noted from Netflix:

We reinforce our view that the biggest opportunity in entertainment is streaming.

“While retention and engagement remain healthy, growth has yet to accelerate back to pre-pandemic levels. We believe that this may be due to several factors, including the ongoing increase in Covid-19 infections and macroeconomic difficulties in various parts of the world such as Latin America.

In addition to this, they added that they maintain their growth in all the countries and regions in which these alternatives have been launched. “This reinforces our view that the greatest opportunity in entertainment is streaming, they argued.

With a slowdown in subscriptions, Netflix increases the price of its plans

According to CNNperformance below expectations is one of the reasons why Netflix announced an increase in fees in both Canada and the United States. The same source points out that good news for the company streaming was recorded in the aforementioned North American markets, where subscriptions increased by 1.2 million during the fourth quarter of 2021, a significant balance compared to the previous quarter.

Premieres on Netflix that do not translate into the expected growth

Following gadgetPerhaps Netflix’s biggest concern should be this: its growth and subscriptions are slowing even during a quarter that saw two of its most-watched movies released, Red Notice Y Don’t Look Up, the latter with performances by Hollywood celebrities such as Leonardo DiCaprio, Jennifer Lawrence and Meryl Streep.

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