Netflix’s subscriber base grew to 222 million last year, but as the pandemic’s surge in interest fades, the streaming service faces a rocky road ahead.
Last year, Netflix added 18.2 million new subscribers, about half of the amount that signed up in 2020.
Investors had thought that the pace of the economy would begin to pick up again. However, the company’s 2022 prediction was disappointing, sending shares down nearly 20% in after-hours trading.
In the three months leading up to March, the company said it anticipated adding only 2.5 million new members, significantly less than experts had predicted.
“Acquisition growth has not yet accelerated to pre-Covid levels,” Netflix said, citing “Covid overhang and macroeconomic issues” in various parts of the world, particularly Latin America.
Netflix, which attracted 8.3 million new customers in the last three months of 2021, believes there is still room for growth as more people abandon traditional television.
However, it acknowledged that increased competition from Disney, Apple, Amazon, and HBO was beginning to have an influence.
To keep users interested, Netflix spends billions of dollars on content. In the last three months of the year, a new season of The Witcher fantasy television series and the farce Don’t Look Up, which has already become the company’s second most successful film ever, were both hits.
However, the company, which recently hiked prices in the United States and Canada, is experiencing rising costs and other issues, including a $1 billion loss due to the strengthening of the dollar, according to the company.
When it comes to subscriber estimates the most significant statistic for streaming services Laura Hoy, an equity analyst at Hargreaves Lansdown, said, “Squid Games creator Netflix has gone from a fairytale to some uncomfortable viewing.”
Revenue increased by 16 percent to $7.7 billion in October, November, and December of last year when compared to the same three months last year. Quarterly profits grew by 12% to $607 million. Profits increased by 19% year on year to $5.1 billion, while revenue increased by 19% to $26.7 billion.