Netflix’s growth slows after lockdown records



Posted on Oct 21, 2020 at 6:10 amUpdated Oct 21, 2020 9:33 AM

The containment boom is over for Netflix. After adding 15 million new subscribers in the first quarter then 10 million in the second, the leader in video streaming unveiled a much smaller figure for the third: 2.2 million.

This number, which brings the total to 195 million subscribers, is slightly lower than his forecast (2.5 million) and represents the lowest volume for the months of July to September in four years. The company’s revenue growth is also slowing. It stood at $ 6.4 billion in the third quarter, up 22% year-on-year, up from 31% in the same period last year. The company’s price fell 5% in trading after the stock market closed on Tuesday.

Full during the first semester

The Californian company recalled that this slowdown was announced in July and that the total of new subscribers over the first nine months of the year was higher than the whole of the year.

2019. “ As expected, growth slowed […]. We believe this is mainly related to our record results in the first half Netflix said in its letter to shareholders. The company refueled much faster at the start of the year than usual thanks to containment.

But the company is suffering from a gradual return to normalcy, with the reopening of restaurants and some of the cinemas, as well as the resumption of other television programs. “ We are back in a world with sport on and off Said Reed Hastings, the company’s co-CEO, who also recognized that the environment was very competitive. “ NOTWe compete with TikTok, YouTube, HBO, and Fortnite.

Competition

Netflix also mentioned the many new services launched recently, including Disney +, which has gained 60 million subscribers in ten months. But the company is already reacting by strengthening itself in animation: Ted Sarandos, its other co-CEO, announced in the magazine “Variety” last week, a goal of six original cartoons per year on the platform.

Despite the Covid-19, the company says it plans a total of 150 original content filmed by the end of the year and to hold its 2021 program announced before the pandemic, with only a delay towards the second half of the year . “ We are confident that we will have an exciting range of programs for our members, especially compared to other services. », Writes the company.

Lack of flagship series

To garner subscribers in the fourth quarter, it relies on season 4 of “The Crown”, one of its original flagship series, and season 2 of “The Witcher”. Between July and September, the few new popular series could also have played a role in the lower number of subscriptions: the biggest hits were the films “The Old Guard” (with Charlize Theron), watched by 78 million people. viewers a month after its release, and “Enola Holmes,” which was slated to hit theaters but eventually sold to Netflix.

The company is also developing more and more content for Asia and is strengthening its efforts in India. It gained just 177,000 new viewers in North America in three months, compared to a million in Asia. “ There is a saturation of Netflix in the United States. With the growth in the number of subscriptions slowing in the domestic market, the increase in revenues will likely come from the increase in price. Says Ross Benes, analyst at eMarketer. The company has just increased its rates in Canada and is preparing to do so next year in the United States, analysts said.

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