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Netflix subscriber growth has slowed dramatically over the summer months after surging in the spring, fueled by pandemic lockdowns that have brought millions to their homes
The summer crisis came as more people sought to distract themselves from the pandemic in the outdoors and professional sports resumed the game, offering other entertainment alternatives to the most popular video streaming service in the world
The drop revealed in Netflix’s latest earnings report Tuesday was more dramatic than management warned
After picking up 22 million customers in the July-September period, Netflix ended the quarter with 1952 million worldwide subscribers Previously, the company had forecast an addition of 25 million subscribers in the quarter
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Regardless, Netflix is still ahead for the year It added 28 million subscribers in the first nine months of the year, securing the company’s biggest annual increase in its history
But momentum appears to be running out of steam, based on trends Netflix is seeing The company predicts a gain of 6 million subscribers in the October-December period, up from 88 million last year Analysts expected Netflix to project a gain of 64 million subscribers for the last quarter of this year
The influx of new subscribers has helped increase its stock by 59% so far this year But Netflix shares have fallen $ 28.53 or 54% to $ 496.89 in after-hours trading after publication of the results
Wall Street still sees big things ahead for Netflix, which is based in Los Gatos, Calif., with its video streaming service set to surpass 200 million subscribers soon
Even with the summer downturn, Netflix’s popularity has sparked speculation whether the company may soon increase its US monthly subscription price by an additional US $ or two, as it lasts. ‘recently made in Canada earlier this month.The company recently stopped offering month-long free trials in the US, a move some analysts see as a precursor to a possible price hike. popular NetflixS plan costs $ 13 per month
The company has steadily increased its prices to help pay for the original programming that has helped make it a cultural phenomenon in the face of increased competition from even bigger competitors such as Amazon and Apple. also help boost Netflix’s profits, which have remained relatively modest given the growing appeal of its video service
The company earned $ 790 million, or $ 174 per share, in the third quarter, up 19% from $ 665 million, or $ 1.47 per share, a year earlier
Analysts expected revenue of $ 2.13 per share and revenue of $ 6.39 billion, FactSet poll shows
Netflix has said that as the world « recovers » from COVID-19 in 2021, it expects its subscriber growth to return to pre-pandemic levels This means the growth will be much higher slow in the first half of next year than it was this year
Netflix, earnings, NASDAQ: NFLX, stocks
World news – CA – Netflix reports summer decline in subscriber growth
SOURCE: https://www.w24news.com
