Daily Times

San Francisco: Netflix on Thursday reported falling short of estimates on new subscribers, and predicted slower growth in 2022 as fierce competition and the pandemic weigh heavy despite hits like “Squid Game” and “Money Heist.”

The streaming service ended the year with 221.8 million subscribers, just below target, after booming during coronavirus lockdowns that kept people at home and on the app.

“We slightly over-forecasted paid net adds in (the fourth quarter),” Netflix said in a letter accompanying its quarterly earnings report.

Netflix said in the earnings report that it expected to only add some 2.5 million subscribers in the first quarter of 2022, certain to fuel investor concerns about the future of sign-ups.

“While retention and engagement remain healthy, acquisition growth has not yet re-accelerated to pre-Covid levels,” Netflix reported.

“We think this may be due to several factors including the ongoing Covid overhang and macro-economic hardship in several parts of the world,” it added.

Most of the 8.3 million subscriptions added at the end of last year came from outside North America, according to the streaming service.

Netflix argued that it was holding its own against fierce streaming competition from the likes of HBO Max and Disney+, saying it “may be affecting our marginal growth some.”

– Stalled production –

But analysts from Parrot Analytics see a significant bite from Netflix’s business.

“Apple TV+, Disney+, and HBO Max account for virtually all of Netflix’s losses in global demand share for original content over the last two years,” they said.

“The world’s leading streamer faces more intense competition than ever heading in 2022,” they added.

Meanwhile, Netflix’s costs continued to rise as it spends on shows and marketing to fend off competition from the likes of Disney+ and Amazon Prime.

“Film is incredibly important for our members, which is why our ambition has always been to work with the world’s best filmmakers and stars to create a wide variety of quality movies,” Netflix said in the letter.

“We took a large step forward in Q4 on this front with our biggest film slate ever.”

The pandemic has stalled production of shows for a while, but Netflix has ramped back up its output of original programming, boasting hits such as “Squid Game,” “Red Notice” and “Money Heist.”

Netflix shares that ended the official trading day at a loss dipped a little further to $508.25 in late trades.

The company reported a net income of $607 million in the fourth quarter on revenue that grew to $7.7 billion.