Netflix faces a rocky road after pandemic wins.
Written byTimes Magazine
Netflix subscribers grew to 222 million last year, but the streaming company faces a tough road as the surge in interest waned during the pandemic. Overall, Netflix added 18.2 million members over the past year about half of its total subscribers in 2020.
But the company's 2022 guidance brought bad news, sending the stock down nearly 20% in after-hours trading. "While retention and engagement remain strong, acquisition growth has not accelerated to pre-Covid levels," Netflix said, citing "Covid hangover and macroeconomic hardship" in parts of the world such as Latin America.
Netflix, which added 8.3 million subscribers during the final three months of 2021, said there was room for growth as more people abandoned traditional television.
However, he admits that new competitors like Disney, Apple, Amazon, and HBO are starting to impact. "Consumers have always had plenty of choices when it comes to their entertainment time a competition that has intensified over the past 24 months as entertainment companies around the world develop their streaming offerings," the company said.
"While this additional competition may affect our marginal growth, we continue to grow in every country and region where this new streaming alternative has been introduced."
But the company, which recently raised prices in the United States and Canada, faces rising costs and another challenge a stronger dollar will only cost the company $1 billion, he said.
"The creators of Squid Games Netflix have gone from fairy tale to tough in terms of subscriber forecasts - the number one indicator for the streaming service," said Laura Hoy, equity analyst at Hargreaves Lansdown.
"The group's guide to new subscriptions for the current period is more than half that of last year," he said. "Management blamed an overloaded content plan that would result in some major problems at the end of the quarter, but investors are no doubt surprised by the slower growth forecast."
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