Netflix shares have tanked, plunging as much as 13% as subscribers desert the big US content provider.
Contributing to Netflix problems is the return to office work following an easing of the COVID-19 pandemic.
Recently whinging residents and business owners in Byron Bay have held an emergency meeting over the proposed Netflix original series, Byron Baes, and called on the streaming platform to cancel the show.
Whinging is common from Byron Bay business owners who have no problems charging $5.99 for a cappuccino or $59 for a small piece of steak but take exception to other people trying to make a living.
According to new data Netflix stream added just 3.98 million subscribers in the first quarter, missing Wall Street’s estimate of 6.29 million and its own forecast of 6 million.
The current quarter will be even more challenging, with Netflix predicting 1 million new customers — a fraction of the 4.44 million projected by analysts.
According to Bloomberg Netflix has been warning for months that growth would slow after customers emerged from Covid hibernation, but few expected it to stall so dramatically.
In comparison Foxtel has witnessed strong growth for their sport streaming app Kayo, they are also witnessing strong viewing of live sports events.
The first quarter of 2020 was string for Netflix as more consumers stayed home. In contrast the latest three months, saw the slowest first quarter since 2013, when Netflix only managed to add 3 million customers.
There weas no mention of how many 2020 customers were no longer subscribing in 2021.
Netflix blamed a “Covid-19 pull-forward” effect in 2020, meaning the pandemic supercharged its growth while everyone was stuck at home and needed something to watch. Now that’s taking a toll on its 2021 results. A lack of new shows also contributed to the slump, the company said. Unlike the previous quarter, Netflix didn’t have as many hits such as “Bridgerton” or “The Queen’s Gambit.”
Production Snags
In Australia Netflix is getting a lot of free publicity for their upcoming Byron Bay show which Netflix Australia has described as “a docu-soap series following a ‘feed’ of hot Instagrammers living their best lives, being their best selves, creating the best drama content. #nofilter guaranteed.”
The show is set to be made by Eureka Productions.
The company’s output slowed in the first quarter due to fallout from the pandemic, which led to production delays.
Netflix was able to sustain its release schedule for the first several months of Covid lockdowns because it had already finished many shows, now they are facing major delays with shows scheduled for production in March, April and May of 2020 halted leading to the current shortfall.
In Australia Disney+ and Britbox have launched in 2020 and HBO Max and Peacock a new streaming service from CBSViacom is set to be launched this year that will compete head on with Netflix.
According to Bloomberg and despite the slowdown, Netflix is in the strongest financial position in its history.
It reported net income of $1.71 billion, more than double a year ago, and generated free cash flow of $692 million during the quarter.
While some of this is due to the curbs in production, it also reflects a stronger foundation. Its streaming service is profitable in many new markets, such as Australia.
Netflix plans to reduce its debt and will buy back $5 billion of shares.
Europe continues to be a bright spot for Netflix. The streaming service added 1.81 million customers across Europe, the Middle East and Africa, leading the company. “Lupin,” a French heist thriller, was the service’s most popular new series in the quarter.
Netflix fell as low as $480 in extended trading, which would be a 2021 low. The stock had risen 1.6% this year through the close Tuesday in New York.
