Netflix missed its target subscriber growth in the first quarter of 2021, adding 4 million net new customers in the period.
The global streaming giant had expected to add 6 million net new customers in the period. The company cited “unprecedented membership growth” in 2020 during Covid-19 shutdowns and a lighter content slate in the first half, due to production delays amid the pandemic, as the reason for slower membership growth in Q1. The platform ended the period with 207.6 million paid memberships, a year-on-year growth of 13.6 percent.
“In the short-term, there is some uncertainty from Covid-19; in the long-term, the rise of streaming to replace linear TV around the world is the clear trend in entertainment,” the company said in its letter to shareholders.
Revenues were $7.2 billion in the quarter, a 24.2 percent year-on-year growth, with a net profit of $1.7 billion. ARPU was up 6 percent.
Netflix expects to add 1 million subs in Q2 and anticipates growth will pick up pace again in the second half with the return of such hits as Sex Education, The Witcher and La Casa de Papel, a range of new movies and new local-language originals.
The streamer says it expects to spend $17 billion on content this year. “Locally authentic stories” remain paramount (read more about this strategy in our coverage of Bela Bajaria at APOS.) “It’s why our priority for local language titles is to have a big impact in the home territory so we don’t sacrifice local impact for ‘travelability.’ But we’re increasingly seeing that these local titles find significant audiences around the world, which supports our thesis that great stories are universal: they can come from anywhere and be loved everywhere.” Highlights in Q1 included Below Zero from Spain, Space Sweepers from Korea, Squared Love from Poland, Who Killed Sara? from Mexico and Lupin from France.
Revenues from the U.S. and Canada in Q1 were $3.2 billion, with 74.4 million paid memberships, adding 450,000 in the quarter. In EMEA, 1.8 million subs were added to reach 68.5 million, with revenues rising to $2.3 billion. In LatAm, Netflix added 360,000 subs to reach 37.9 million customers, generating revenues of $837 million. AsiaPac membership rose by 1.4 million to reach 26.85 million, generating revenues of $762 million.