Thursday, February 2

Netflix shares fall 20% as it misses its subscription forecast

Netflix closed 2021 with about net benefits of 5,116 million dollars, about double than the previous exercise, in a year in which, however, slowed down of new users, with 18 million compared to 37 million in 2020.

The Los Gatos-based company (California, USA) has 221.8 million subscribers to its streaming service around the world, but as competition increases its ability to attract new customers continues to slow, as 2021 recorded the lowest growth in the last three years. In addition, the company lowered forecasts for the first quarter of 2022 and forecast that it will add 2.5 million subscriptions, far from the 3.9 it achieved during the same period in 2021.

letter to investors

“Although the new competition may be affecting our growth a bit marginally, we continue to grow in all countries and regions where new alternative platformsNetflix said in a letter to investors published on Thursday.

However, the explanations they did not convince on Wall Street and the company’s shares fell 18% to $412 per share in electronic trading after New York’s stock markets closed.

The two factors to which Netflix attributed this slowdown They are the entry of new options in the “streaming” market, such as Disney and Apple, and the lack of premieres in the first half of the year, mostly due to the postponement of filming during the hardest months of the pandemic. The best period of the company occurred between october and december, coinciding with the premiere of global phenomena such as “The Squid Game”, “Red Notice”, “Don’t Look Up” and the latest season of “Money Heist”.

8.2 million subscribers

During that last quarter of the year, the strongest for the television market, Netflix added 8.2 million subscribers and obtained a net profit of 607 million dollars compared to the 542 million it registered in the same period of 2020.

The reduction in new registrations has not diminished the company’s profitability, since its annual net profits reached 5,116 million dollars, almost double the 2,761 million it earned during 2020. In total, Netflix invoiced in 2021 almost $30 billion, compared to 25,000 million in 2020, and increased investment in ‘marketing’ (2.5 million) and technology (2.2 million).

In fact, the company took advantage of its strength in the market of the entertainment.

‘Squid Game’

“During 2021 we had the most important television program of the year (‘Squid Game‘), the two strongest film premieres in our history (‘Red Notice’ and ‘Don’t Look Up’), and Netflix was the television platform and the studio with the most awards and nominations at the Emmys and the Oscars,” he boasted. in your report.

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By 2022, the company will redouble its commitment to the international market, as more than 90% of subscribers signing up during 2021 came from outside the US and Canada (UCAN), with particularly strong growth in Japan and India.

The stagnation in the US also does not seem to worry Netflix, which last week announced a general rise in prices in the country, with monthly rates ranging from $9.99 for the basic plan to $19.99 for the ‘premium’ package.