Netflix subscriber growth slows after pandemic boom as shares fall 11%

Production of new programming has been hindered by Covid-19

Eve Hewson in 'Behind Her Eyes', on Netflix.

Netflix fell short of Wall St’s projections for new customers in the first quarter, the company said on Tuesday, sending shares down 11%.

Roughly 3.98mm people signed up for Netflix from January through March, below the 6.25m average projection of analysts surveyed by Refinitiv.

Netflix forecast just 1m new streaming customers in the second quarter. Analysts had expected a forecast of nearly 4.8m.

Shares of Netflix, the world’s largest streaming service, sunk 11% in after-hours trading to $489.28 (€406.28).

A year ago, Netflix added a staggering 15.8m customers as the pandemic forced people around the world to stay home. 

The company said  the pandemic had brought in a record number of customers in 2020 but also hindered production of new programming.

“These dynamics are also contributing to a lighter content slate in the first half of 2021, and hence, we believe slower membership growth,” the company said in its quarterly letter to shareholders.

Rival media companies have declared streaming their priority and are spending billions to compete with Netflix. Walt Disney Co’s Disney+ crossed 100m subscribers in March.

Netflix said it did not believe competition changed materially in the quarter or impacted its new sign-ups “as the over-forecast was across all of our regions.” 

During the quarter, Netflix lost one of its most popular titles when workplace comedy The Office moved to Comcast streaming service Peacock.

Netflix also raised its monthly rates in the UK, Germany, Argentina, and Japan during the quarter.

Excluding items, the company earned $3.75 per share, beating analyst estimates of $2.97 per share.

Revenue rose to $7.16bn from $5.77bn during the quarter, edging past estimates of $7.13bn.

Net income rose to $1.71bn, or $3.75 per share, from $709m, or $1.57 per share, a year earlier.

Meanwhile, Apple has unveiled new versions of its iPad Pro and iMac desktop computer, the latest devices to be given the firm's own-design computer chips which offer a performance boost.

The M1 chip, which was announced last year, will see Apple gradually introduce its own silicon to all its computers over the next few years, replacing Intel processors and greatly improving performance, the company claims.

The announcements were made during the firm's latest virtual event, as the tech giant continues to hold remote showcases as part of its ongoing Covid-19 response.