Netflix’s stock price fell on Tuesday after the American streaming TV giant reported that in the early stages of the pandemic, the company’s subscriber growth slowed in the most recent quarter.
The company said in an earnings report that although Netflix has added 28.1 million paid subscribers so far this year, only 2.2 million of them came from the third quarter.
Netflix said in the letter: “We think this is mainly due to our record first-half performance and forward push effect.”
The streaming TV giant is currently facing a series of competitors, and reportedly has slightly more than 195 million subscribers.
According to earnings data, the Asia-Pacific region has the strongest growth.
Netflix said: “We are pleased with the progress we have made in the region, especially since we have achieved double-digit broadband home penetration in South Korea and Japan.”
“Although this is encouraging, we still have a lot of work to do and we are working hard to replicate this success in India and other countries.”
Chief Operating Officer Greg Peters said in an earnings interview that Netflix hopes to promote growth through promotional activities, such as providing free streaming TV services on weekends and will try it out in India.
Are prices in play?
The streaming TV service is expected to add 6 million new subscribers this quarter, bringing the total number of members added this year to a record 34 million.
eMarketer forecast analyst Ross Benes said: “Unsurprisingly, Netflix did not continue to increase subscribers in the early stages of the pandemic.” He pointed out that the company’s membership growth this year still exceeded expectations.
Benes believes that as domestic subscriber growth slows, Netflix’s revenue growth is likely to come from price increases.
When asked if it is possible to increase subscription prices, Peters replied that Netflix will evaluate its local content lineup, its ability to retain members in each country and more, and then decide whether to “require these members to pay more.” “.
Peters said: “We think we have incredible entertainment value, and we very much hope to maintain incredible value while we continue to improve and grow.” He does not rule out the possibility of price changes.
Netflix announced net income of 790 million US dollars (approximately 57.96 billion rupees) and revenue of 6.4 billion US dollars (approximately 46,958 crore), easily exceeding the same period last year.
After the financial report was announced, Netflix stock fell more than 5% in after-hours trading.
Show beginning to take shape
Netflix said it is making “good and careful progress” in producing original content that is vital to winning and retaining subscribers.
The company said that productions that were derailed during the pandemic have returned to the track of popular shows including “Stranger Things” and “The Witcher”, as well as by Gal Gadot (Dalne Johnson) and Ryan Reynolds (Ryan Reynolds). ) Starring in an action movie.
Netflix expressed confidence that it will complete the shooting of more than 150 works by the end of the year, and the number of Netflix original works released in 2021 will exceed the number released this year.
Netflix said: “The competition for consumer time and participation is still fierce.”
“Linear TV and other major entertainment categories, such as video games and user-generated content from YouTube and TikTok, are all competing for consumers’ attention and are an important driver of screen time.”
Apple, Comcast, Disney and other companies have also taken over Netflix through their own streaming TV services.
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