Netflix said the slowdown in the production of TV shows and movies during the pandemic affected subscriber growth in the first quarter, causing the stock of the world’s largest streaming service to drop 11% on Tuesday.

From January to March, approximately 3.98 million people signed up for Netflix, which was lower than the 6.25 million expected by analysts surveyed by Refinitiv.

Netflix estimates that the second quarter will only add 1 million new streaming media customers. Analysts had expected nearly 4.8 million.

Netflix shares fell 11% in after-hours trading to $489.28 (approximately 37,000 rupees), evaporating the company’s market value of $25 billion (approximately 188.88 billion rupees). In the past 12 months, its stock price has risen by 27%, while the high-tech Nasdaq Composite Index has risen by 63%.

Netflix stated that it does not think there will be a substantial change in competition this quarter or affect its number of new contractors, because “the forecast is true for all our regions.”

The company expects that the number of members will accelerate in the second half of the year following the release of new films such as “You”, “Money Heist” and “The Witcher” and the action film “Red Notice” in the second half of the year.

A year ago, due to the pandemic forcing people all over the world to stay at home, Netflix’s number of subscribers hit a record 15.8 million. The company said on Tuesday that the pandemic hindered the production of new shows.

The company said in its quarterly letter to shareholders: “These developments have also contributed to a reduction in content volume in the first half of 2021. Therefore, we believe that the rate of membership growth will slow.”

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Analysts predict that with the popularity of the COVID-19 vaccine and the emergence of people, people will spend less time in the living room.

Competitor media companies have announced that they will prioritize streaming and spend billions of dollars to compete with Netflix. Walt Disney’s Disney+ exceeded 100 million subscribers in March. As of the end of March, the total number of Netflix streaming media customers was 207.6 million.

According to data from Kantar Media, Netflix’s share of new subscribers in the United States in the quarter fell from 16.2% in the same period last year to 8.5%.

During the quarter, when the workplace comedy “The Office” moved to Comcast streaming service Peacock, Netflix lost one of its most popular games.

Netflix also increased its monthly rates in the United Kingdom, Germany, Argentina and Japan during the quarter.

The total number of new customers in Europe is 1.8 million, Asia is 1.36 million, and Latin America is 360,000.

eMarketer analyst Eric Haggstrom (Eric Haggstrom) said: “Unexpectedly, the growth of the international market has slowed down, and competition has significantly weakened.”

Excluding items, the company’s first-quarter earnings per share were US$3.75 (approximately 280 rupees), which was higher than analysts’ expected earnings per share of US$2.97 (approximately 220 rupees).

Revenue for the quarter increased from US$5.77 billion (approximately Rs 43,600 crore) in the quarter to US$7.16 billion (approximately Rs 54,100 crore), slightly higher than the previous estimate of US$7.13 billion (approximately Rs 538.88 crore).

Net income increased from US$709 million (approximately Rs 53.6 billion) or US$1.57 per share (approximately Rs 120) to US$1.71 billion (approximately Rs 129.91 billion) in the same period last year, or US$3.75 per share (approximately Rs 280) ), equivalent to 1.57 US dollars per share (approximately 120 rupees). .
Thomson Reuters 2021 ©

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