Netflix Fails to Meet Subscriber Expectations in 1Q21

The rapid growth of Netflix's subscriber base seen during the pandemic last year appears to be slowing down as economies reopen around the world and competition in the streaming market heats up. The company giant added fewer paid subscribers than expected in 1Q21 due to production delays due to COVID-19. “It is just a little wobbly right now,” said Reed Hastings, Netflix Chairman and Co-CEO, during a video call with investors to discuss results. While analysts expected the company to add almost 6.25 million paid subscribers, the streaming giant added 3.98 million paid subscribers, according to IBES data from Refinitiv. 

“We believe paid membership growth slowed due to the big COVID-19 push forward in 2020 and a lighter content slate in the first half of this year due to COVID-19 production delays,” Netflix said in its report to investors.

Although competition with rivals such as Disney+, HBO Max and Amazon Prime has intensified, the company believes this did not affect its results. “We do not believe competitive intensity materially changed in the quarter or was a material factor in the variation as the over-forecast was across all of our regions. We also saw similar percentage year-on-year declines in paid net adds in all regions, whereas the level of competitive intensity varies by country,” the company noted. In the so-called streaming war, Disney+ has positioned itself as one of the strongest competitors for Netflix by reaching 94.9 million subscribers in 1Q21, which ended in early January,

At the end of 2020, Netflix hit 203.66 million paying subscribers, 21.9 percent more than a year earlier. In Latin America, subscribers increased 1.2 million to 37.54 million. In November, Mickey Mouse’s platform joined the Mexican market, in which Netflix leads with a 36 percent market share, followed by Amazon Prime Video with 22 percent, Claro Video with 14 percent and HBO Go with 11 percent, according to CNET.

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