Netflix Subscriber Growth Slows

Netflix is projecting it will add 2.5 million subscribers in the first quarter of this year after gaining 8.3 million customers in the fourth quarter of 2021, missing its 8.5 million forecast.

The streaming giant delivered revenues of $7.7 billion in Q4, a 16 percent year-on-year growth, with a net income of $607 million. The platform ended Q4 with 221.84 million subs. In 2021, more than 90 percent of paid net additions came from outside North America.

“Our guidance reflects a more back-end weighted content slate in Q1’22 (for example, Bridgerton S2 and our new original film The Adam Project will both be launching in March),” the company said. “In addition, while retention and engagement remain healthy, acquisition growth has not yet re-accelerated to pre-Covid levels. We think this may be due to several factors, including the ongoing Covid overhang and macro-economic hardship in several parts of the world like LatAm.”

The company’s letter to shareholders continues: “Consumers have always had many choices when it comes to their entertainment time—competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering. While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched. This reinforces our view that the greatest opportunity in entertainment is the transition from linear to streaming and that, with under 10 percent of total TV screen time in the U.S., our biggest market, Netflix has tremendous room for growth if we can continue to improve our service.”

The U.S. and Canada delivered revenues of $3.3 billion from 75 million paid subs, a net addition of 1.2 million and an ARPU of $14.78. In EMEA, revenues rose to $2.5 billion from 74 million subs, a gain of 3.5 million. ARPU in the quarter was $11.64. LatAm revenues rose to $964 million, with the platform adding 970,000 subs to reach just under 40 million, with ARPU rising to $8.14. AsiaPac added 2.6 million subs to reach 32.63 million, delivering revenues of $871 million and an ARPU of $9.26.