Despite producing global hits like ‘Squid Game’ in 2021, streaming giant Netflix saw slow growth in new subscribers in the fourth quarter last year — its slowest since 2015.
The streaming platform added 8.3 million paid subscribers as opposed to its projected 8.5 million.
Netflix now forecasts to add just 2.5 million subscribers in Q1 2022, down from 4 million last year.
The forecast and slow growth led to a nearly 20 percent fall in its stock at the close of trading on Thursday.
“We delivered 8.3 million paid net adds. So it was just a bit shy about tenth of a per cent of roughly 222 million paying members,” said Netflix Co-founder and Chairman Reed Hastings in an earnings call.
It is “definitely frustrating for us, the current slower growth”, he added.
Hastings said that overall, the business was healthy and retention was strong.
“But on the margin, we didn’t grow acquisition quite as fast as we would have liked to see on our large subscriber base. Our acquisition was growing, just not growing quite as fast as we were perhaps hoping or forecasting,” he admitted.
The company said that even in a world of uncertainty and increasing competition, “we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world”.
At $7.7 billion, the revenue in Q4 2021 grew 16 per cent (year over year) with a 9 per cent increase in average paid memberships.
“It’s a dynamic market for sure, it may not be as steady as people think about it in terms of we’re gonna add X number every quarter, every month, every week, but there’s no question that’s the direction the business is going in,” said co-CEO Ted Sarandos.