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NETFLIX SHARES PLUNGED yesterday after the streaming service reported cooling growth in paid subscriptions after a boom last year.
While revenue jumped 24% in the first quarter of this year when compared to the same period in 2020, paid memberships grew less than expected to 208 million, Netflix said in its quarterly earnings release.
New subscriber additions were some two million below Netflix’s forecast.
“We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays,” executives said in the release.
Netflix reported profit was up to $1.7 billion on revenue of $7.2 billion, as subscribers weathered price increases.
The Silicon Valley-based company said it expected subscriber growth to accelerate again later this year as it releases sequels to hit shows.
“We had those ten years where we were growing smooth as silk,” Netflix chief executive Reed Hastings said on a streamed earnings call.
“It is just a little wobbly right now.”
Netflix executives had cautioned in past quarters that the pandemic fueled a surge in subscriptions, with people who would have eventually signed up jumping on board sooner than they might have.
“We continue to anticipate a strong second half with the return of new seasons of some of our biggest hits and an exciting film lineup,” Netflix said in an earnings letter.
A shift from traditional television to streamed services such as Netflix remains a clear trend, according to the company.
However, competition is also ramping up from Disney, Amazon and other titans.
“More and more new streaming services are launching, reinforcing our vision that linear TV will slowly give way to streaming entertainment,” Netflix said.
“We’re working as hard as ever to continually improve our service so that we are the best entertainment option available.”
But the sharp deceleration suggested slower growth ahead from Netflix, sending shares down some 11% in after-hours trade.
Hastings said that competition in the streaming television market has been consistently fierce, with Amazon Prime and Hulu as rivals for more than a decade.
The cooling is a “sign that the world is coming back to more normal at the expense of Netflix,” tweeted Gene Munster of the investment firm Loup Ventures.
“We think the long-term growth is flattish.”
Production delays
Productions delays caused by the pandemic have resulted in the release of many original Netflix shows being delayed until the second half of this year, according to the company.
“While the rollout of vaccines is very uneven across the world, we are back up and producing safely in every major market, with the exception of Brazil and India,” Netflix said.
The streaming television service expected to spend more than $17 billion on a wide range of content, much of it original.
New seasons of hit shows set for release later this year included Sex Education, The Witcher, La Casa de Papel (Money Heist), and You.
Original films slated to arrive include the finale to The Kissing Booth trilogy; Red Notice starring Gal Gadot, Dwayne Johnson and Ryan Reynolds, and Don’t Look Up which has a cast including Leonardo DiCaprio, Jennifer Lawrence, Cate Blanchett, Timothee Chalamet, and Meryl Streep.
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Credit where due well done although very difficult on families where there is no power. Thankfully we dont get too many storms like the few we had. Anyone see the news the UK still in bits far worse than us.
Still out in rear cross co tipp.fair play to esb networks though cant be easy working true such a backlog
Thank you for keeping this story in peoples mind.So many still have with no idea of when they will be switched back on.
Day 6 without power and im one of those isolated pockets ive been told. Probably be end of week before connection. Im going to go crazy!
A big well done to all the ESB crew, but surely they will consider putting electricity wires down under ground
Think about it….
There are 10s of thousands of KMs of local electricity cabling around the country.
How do you even begin to do that?
It would cost a biblical amount of money.
Or at least cutting back/removing of trees near power lines. A job for Coillte I would think.
There is no utility on Earth that has its rural distribution lines underground for one simple reason: cost. Undergrounding overhead lines would cost many multiples of the overhead cost and this would have to be passed on to the consumer. Our electricity bills are high enough as they are – no one wants to see them tripled, quadrupled or whatever. If it were a realistic option you’d think a place like Florida which suffers multiple major outages every year because of hurricanes would have done it years ago, but no: they have overhead lines as well. Nor would it necessarily result in the elimination of faults – they would still occur due to flooding, cable failures, dig-ins and the like. And it would take longer to repair or replace them. There would also be huge delays in connecting new properties to the network caused by the time involved in digging the trenches, getting permission from landowners and so forth. Nor of course would it be remotely realistic to initiate a programme of replacing the existing network of overhead lines with underground ones. All in all, on the face of it, it sounds like a reasonable proposition but when you examine it deeper it becomes a pipe-dream.
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