Netflix Subscriptions Slow As Competition Heats Up
As the content streaming market gets brutally competitive, Netflix is struggling to attract new subscribers as growth slows and their content lacks a compelling reason to subscribe.
One standout market is Australia while in the USA consumers close to half a million dropped their Netflix subscription.
Overnight Netflix revealed that the post-lockdown world is very different now despite markets such as Australia going back into lockdown.
The US streaming Companies subscriber forecast has come in well below Wall Street estimates with their shares falling 6.6% on the news.
The Company said that sign-ups of new customers will be 3.5 million in the third quarter, compared with the 5.86 million analysts had projected.
The company added 1.54 million customers in the second quarter.
It’s the slowest start to a year for Netflix since 2013, when the service was operating in fewer than half as many countries. With the pandemic subsiding, customers are watching less TV this year on average than they did a year ago, the company said.
Netflix, the world’s largest paid streaming service, had already warned that 2021 would start slowly after record-seeing growth a year ago.
The company signed up nearly 26 million new customers in the first half of 2020 as people stuck at home during the pandemic flocked to its movies and shows.
“The pandemic has created unusual choppiness in our growth and distorts year-over-year comparisons,” the company said in a letter to shareholders.
In 2020 Netflix shares surged 67% however that rally has fizzled this year.
The stock was down 2.3% through the first six months of 2021, the worst first half since 2016.
Asia-Pacific which includes Australia and Latin America, accounted for almost all of Netflix’s subscriber growth in the second quarter.
Those are the company’s two smallest regions. The service lost 430,000 customers in its largest region, the U.S. and Canada, the first time it has shrunk at home in two years.