Subscriber slowdown wipes more than £11bn off Netflix’s value as pandemic boom ends
More than £11billion was wiped off Netflix’s value as a slowdown in the growth of subscribers sent the streaming giant’s shares tumbling.
The company, which is behind hits such as Bridgerton and The Crown, saw its stock fall by as much as 8 per cent after trading began yesterday.
It came hours after Netflix revealed it had added just 4m subscribers in the first three months of this year, taking the total to 207.6m.
Steaming success: Regé-Jean Page and Phoebe Dynevor (centre) star in the Netflix hit Bridgerton
That represented a slowdown compared to the rapid growth it enjoyed in the outset of the pandemic, when it piled on 10m customers in a single quarter.
Also of concern to investors was Netflix’s prediction that it will add just 1m customers from April to June this year.
The company blamed the lacklustre figures on a ‘pull forward’ that saw many customers join earlier in the Covid-19 crisis, as well as a weaker programme of new shows in the first half of 2021 due to production delays caused by the pandemic.
But it will be seen as a sign that the ‘pandemic effect’ on demand for streaming services – where tens of millions of families signed up to escape boredom during lockdowns – could be coming to a end.
Netflix has also been facing tougher competition in the past year after the media giant Disney launched a rival service.
Netflix admitted there would be ‘some uncertainty’ in the coming months but added: ‘In the long-term, the rise of streaming to replace linear TV around the world is the clear trend in entertainment.
‘We are optimistic about the future and believe we are still in the early days of the adoption of internet entertainment, which should provide us with many years of growth ahead.’
The firm is predicting a stronger second half, when bosses hope new seasons of shows such as Sex Education, The Witcher, Money Heist and You will pull more subscribers in.
It is also set to plough a record £12.2billion into producing new content –- up from £8.5billion in 2020 and £10billion in 2019.
It said it has now returned to making TV shows and films in all markets except Brazil and India.