Thursday, May 19, 2022

Netflix shares tumble on slowing subscriber growth

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Netflix reported on Thursday that subscriber growth had slowed, with its stock price falling nearly 20 percent in post-market trading.

The world’s largest streaming service had indeed reported better-than-expected earnings from Wall Street analysts, but subscription numbers forced investors to knock on the door.

Netflix, which hosts shows like The Crown, Stranger Things and Bridgerton, added 8.3 million subscribers in the quarter, down from the previous 8.5 million.

While Netflix predicted a slowdown in subscriber growth over the year, it has yet to fully materialize, as the streamer has taken unexpected hits like the South Korean drama Squid Game, which boosted recordings in the third quarter.

Netflix attributed the weaker-than-expected growth to some regions, including COVID disruptions in Latin America and “macroeconomic challenges”.

Netflix has counted Emily in Paris’s new season in the fourth quarter of 2021 to increase subscribers.

Netflix recently announced an increase in subscription prices there to counter the slowdown in growth rates in the U.S. and Canada, as the streaming company ended the year with 222 million global subscribers.

“Even in a world of growing uncertainty and competition, we are optimistic about long-term growth prospects as the flow replaces linear entertainment around the world,” Netflix said, explaining exactly why fourth-quarter subscriber forecasts were turned off. without explanation.

Henry Cavill in The Witcher
Netflix noted that The Witcher’s second season helped boost viewership last quarter. Still, the streaming giant missed subscriber targets during this period.

Still, the company, led by Reed Hastings and Ted Sarandos, called for new shows that brought together big shows like “You,” “The Witch,” “Emily in Paris” and “Cobra Kay.”

In the fourth quarter, Netflix posted net income of $ 607 million, or $ 1.33 per share of revenue of $ 7.71 billion. Wall Street was expecting an 82-cent EPS from $ 7.71 billion in revenue.

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