Netflix shares fall 20% due to low number of subscriptions
The number of Netflix subscribers rose to 222 million last year, but now it seems the interest growth they saw during the pandemic is fading.
In total, Netflix added 18.2 million members last year, roughly half the number they subscribed to in 2020.
Investors had hoped the pace would start growing again. But the firm's forecast for 2022 did not come out as forecast, shares fell almost 20%.
The firm said it expected to add 2.5 million members in the first three months of the year, far less than analysts had expected.
"While retention and engagement are healthy, purchasing growth has not yet accelerated to pre-Covid levels," Netflix said.
Netflix, which added 8.3 million subscribers in the last three months of 2021, claimed that there is still room for growth, as more and more people are moving away from traditional television.
The company acknowledged that even new competition from companies like Disney, Apple, Amazon and HBO had begun to make an impact.
"Consumers have always had a lot of choices when it comes to their entertainment time, competition which has grown over the last 24 months as entertainment companies around the world improve broadcast offerings," the firm said.
"Although this increased competition may have little effect on our marginal growth, we continue to grow in every country and region in which these new transmission alternatives have begun to be used."
Netflix is ??spending billions of dollars on content creation to keep viewers interested. The hits over the last three months of the year included a new season of "The Witcher" and the satire "Don't Look Up" which has already become the second most watched movie on the platform.
But the firm, which recently raised prices in the US and Canada, is facing rising costs and other challenges.
Revenue rose 16% in October, November and December, compared to the same period a year earlier, reaching $ 7.7 billion. Quarterly profits rose 12% to $ 607 million.