Logo of Phnom Penh Post newspaper Phnom Penh Post - Netflix takes a hit by slowing subscribers

Netflix takes a hit by slowing subscribers

Content image - Phnom Penh Post
The Netflix logo is seen on top of their office building in Hollywood, California. AFP

Netflix takes a hit by slowing subscribers

Netflix on Thursday reported cooling subscriber growth 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 platform.

Things are not looking better for the first quarter of 2022, with the Netflix earnings report saying the firm expected to only add some 2.5 million subscribers.

The market punishment was immediate, with shares of the California streaming giant losing some 20 per cent in after-hours trading.

The last first-quarter expectation under 2.5 million subscribers came in 2010, when Netflix had a mere 13.9 million customers.

“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”.

Fierce competition

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

Content image - Phnom Penh Post
(From left to right) Actor Jon Bernthal, director Nora Fingscheidt and actress Sandra Bullock arrive for the premiere of Netflix’s The Unforgivable at the Directors Guild of America in Los Angeles, the US state of California, on November 30 last year. AFP

“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.

Analyst Rob Enderle said the markets are already a bit jittery at the moment with concerns over inflation and geopolitical tensions with China and Russia – and competition is fierce.

“Netflix will increasingly find it hard to stand out and attract subscribers; even the major television networks have their own services now,” he noted.

“When people are having trouble affording gas and groceries, it is going to be hard for them to justify another streaming service,” Enderle added.

The platform benefited from the global success of the South Korean series Squid Game, which had been seen by more than 142 million subscribers (about two-thirds of users) by mid-October, one month after its release.

Netflix confirmed a second season was coming, but did not give exact timing.

Fans meanwhile will have to wait until March for large-scale releases such as season 2 of the wildly popular Bridgerton.

Facebook recently announced subscription price bumps in the US, with the basic option now costing $9.99, and the most expensive going up to $19.99.

Meanwhile, Netflix’s costs continued to rise as it spends on shows and marketing to fend off competition.

“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.

The pandemic 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.

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

MOST VIEWED

  • Research key to Kanitha’s rep for expertise

    Sok Kanitha is used to weighing in on controversial issues using a confident approach that signals expertise and authority, and a recent video she made was no exception. Her “Episode 342: The History of NATO” video went live on January 16, 2023 and immediately shot to 30,000 likes and 3,500

  • Cambodia maintains 'Kun Khmer' stance despite Thailand’s boycott threat

    Cambodia has taken the position that it will use the term "Kun Khmer" to refer to the sport of kickboxing at the upcoming Southeast Asian (SEA) Games, and has removed the term Muay from all references to the sport. Despite strong reactions from the Thai

  • Artificial insemination takes herd from 7 to 700

    Some farms breed local cows or even import bulls from a broad for the purpose of breeding heavier livestock for meat production. One Tbong Khnum farmer has found a more efficient way. Hout Leang employs artificial insemination to fertilise local cows. Thanks to imported “straws”

  • Chinese group tours return to Cambodia starting Feb 6

    Cambodia is among 20 countries selected by Beijing for a pilot programme allowing travel agencies to provide international group tours as well as flight and hotel packages to Chinese citizens, following a three-year ban. As the days tick down until the programme kicks off on February 6,

  • Capital-Poipet express rail project making headway

    The preliminary results of a feasibility study to upgrade the Phnom Penh-Poipet railway into Cambodia’s first express railway indicate that the project would cost more than $4 billion and would take around four years to complete. The study was carried out by China Road and

  • Thai boxers to join SEA Games’ Kun Khmer event

    The Cambodian SEA Games Organising Committee (CAMSOC) – together with the Kun Khmer International Federation (KKIF) and Khmer Boxing Federation – have achieved a “great success” by including Kun Khmer in the upcoming biennial multi-sports event on its home soil for the first time, said a senior