Netflix Shares Drops Following Decrease In Subscriber Growth
A newly release Netflix quarterly report, which revealed that the streaming service missed its forecast by millions of subscribers, has led to the plunging of its shares by 13%.
In examining the first quarter of 2020, which was the strongest in history, Netflix reeled in 15.8 million new customers and maintained the pace until the fourth quarter. Due to the outstanding performance of 2020, Wall Street and various analysts had predicted an average of 6.29 subscribers for the first quarter of 2021, with Netflix projecting to receive 6 million subscribers in its first quarter. However, the content platform added messily 3.98 million subscribers making the first quarter the weakest start of the year since 2013 where Netflix added about 3 million subscribers.
Responding to the drop in numbers, Netflix said due to the pandemic accelerating its growth in 2020 while the global population was on lockdown and needed content to keep themselves entertained, the surge has now taken a toll on its 2021 results.
Following the results from the first quarter, the giant has projected 1 million customers for the second quarter, a fraction of the 4.44 million customers forecasted by analysts.
During a webcast, Spencer Neumann, the company's Chief Financial Officer said, the outcomes result from COVID because there has been a lack of new shows. Supporting the Netflix view is Michael Nathanson, an analyst with MoffettNathanson LLC, who cited that the first quarter had no content.
Co-CEO and Content Chief Tend Sarandos has said that the company's current strategy is to mitigate the first-quarter results by delivering audience-focused programming.