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Image Credit - BBC[/caption]
Netflix added 18.2 million members last year. In 2020 the complete number of Netflix subscribers was just half of it. Netflix investors thought the pace will continue this year as well.
But 2022 brought bad news to the firm. This sends the shares down, almost 20% in after-hours trade.
The company expected to add 2.5 million members in the three months to march, far low than the analysts expected.
‘While retention and engagement remain healthy, acquisition growth has not yet re-accelerated to pre-COVID levels,’ Netflix shared.
They also pointed out, ‘COVID overhang and macro-economic hardship’ in various parts of the world like South America.
Netflix added 8.3 million subscribers in just the last three months of 2021. Many subscribers have moved back to traditional television.
They also admitted that several new competitions like Disney, Apple, Amazon, and HBO were started impacting their business.
‘Consumers have always had many choices when it comes to their entertainment time - a competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering’, Netflix said.
They also added, ‘While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched.’
Netflix is investing billions of dollars in content to engage the viewers. They have offered a new season of the’ Witcher’ fantasy television series along with ‘Don’t look up’ this satire has already become the second most popular film of this company.
But the firm also raised its prices in the US and Canada, to keep up with the expenses of the firm. As they are already facing problems like rising costs and other challenges. And the strengthening of the dollar will cost $1bn of it’s on.
Luna Hoy, an equity analyst at Hargreaves Lansdowne said, ‘Squid Games creator Netflix has gone from a fairytale to some difficult viewing when it comes to subscriber forecasts - the most important metric for streaming services.'
She added further, ‘The group's forecast for new subscriptions in the current period came in at just over half of last year's figure," she said. "Management blamed a back-loaded content schedule that will see several big releases come out at the end of the quarter, but investors were undeniably spooked by the slower growth forecast.’
Revenue increased by 16% for October, November, and December compared to the same period of the prior year hitting 7.7 billion dollars. Quarterly profits increased 12% to 607 billion dollars. For the year, profits jumped from 2.7 billion dollars to 5.1 billion dollars. And the revenue grew by 19% making 26.7 billion dollars.
With all the completions and increasing value Netflix has been witnessing a bumpy ride from the beginning of 2022.
Image Credit - BBC[/caption]Netflix added 18.2 million members last year. In 2020 the complete number of Netflix subscribers was just half of it. Netflix investors thought the pace will continue this year as well.
But 2022 brought bad news to the firm. This sends the shares down, almost 20% in after-hours trade.
The company expected to add 2.5 million members in the three months to march, far low than the analysts expected.
‘While retention and engagement remain healthy, acquisition growth has not yet re-accelerated to pre-COVID levels,’ Netflix shared.
They also pointed out, ‘COVID overhang and macro-economic hardship’ in various parts of the world like South America.
Netflix added 8.3 million subscribers in just the last three months of 2021. Many subscribers have moved back to traditional television.
They also admitted that several new competitions like Disney, Apple, Amazon, and HBO were started impacting their business.
‘Consumers have always had many choices when it comes to their entertainment time - a competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering’, Netflix said.
They also added, ‘While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched.’
Netflix is investing billions of dollars in content to engage the viewers. They have offered a new season of the’ Witcher’ fantasy television series along with ‘Don’t look up’ this satire has already become the second most popular film of this company.
But the firm also raised its prices in the US and Canada, to keep up with the expenses of the firm. As they are already facing problems like rising costs and other challenges. And the strengthening of the dollar will cost $1bn of it’s on.
Luna Hoy, an equity analyst at Hargreaves Lansdowne said, ‘Squid Games creator Netflix has gone from a fairytale to some difficult viewing when it comes to subscriber forecasts - the most important metric for streaming services.'
She added further, ‘The group's forecast for new subscriptions in the current period came in at just over half of last year's figure," she said. "Management blamed a back-loaded content schedule that will see several big releases come out at the end of the quarter, but investors were undeniably spooked by the slower growth forecast.’
Revenue increased by 16% for October, November, and December compared to the same period of the prior year hitting 7.7 billion dollars. Quarterly profits increased 12% to 607 billion dollars. For the year, profits jumped from 2.7 billion dollars to 5.1 billion dollars. And the revenue grew by 19% making 26.7 billion dollars.
With all the completions and increasing value Netflix has been witnessing a bumpy ride from the beginning of 2022.
