Netflix shares plunge as subscribers switch off

Netflix shares plunge as subscribers switch off
Netflix shares plunge as subscribers switch off. Source: GETTY IMAGES
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Daily US Times: Netflix has reported a slowdown in subscriber growth around the world, sending its shares tumbling.

About 3.98 million people signed up for the vidoe streaming giant between January and March, well short of the projected 6 million.

The streaming giant said a lack of new shows may have contributed to the decline, adding that the company expected this to recover as sequels to hit shows are released.

The company’s shares fell 11% in after-hours trading to $489.28, wiping $25bn off the company’s market capitalization.

Netflix added 15.8 million new subscribers last year as the coronavirus pandemic forced people around the world to stay home.

Much of that growth came in Asia, where the streaming service added 9.3 million new subscribers in 2020, an increase of about 65% over the previous year.

But the Covid-19 pandemic has proven a double-edged sword for Netflix, because it also disrupted its production pipeline.

In its quarterly letter to shareholders, the company said: “These dynamics are also contributing to a lighter content slate in the first half of 2021, and hence, we believe slower membership growth.”

Netflix projected poor customer growth ahead, with an additional 1m new customers in the second quarter, far short of the previously predicted 5 million.

The company also faces increasingly stiff competition from new streaming services entering the market.

Disney+, a much newer streaming service, already has 100 million subscribers, while Netflix has 207.6 million.

Even with sluggish customer growth, Netflix has reported revenues of $7.16bn and net income of $1.71bn.

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