Investors Are Worried, Netflix Has Not Experienced Subscriber Growth Since Late 2021

Netflix investors worry the company isn't adding subscribers fast enough. (photo: doc. unsplash)

JAKARTA - After news of an increase in the price of Netflix subscriptions last week in the United States (US) and Canada, the company is now under criticism from its investors for slowing subscriber growth.

Netflix investors worried the company wasn't adding subscribers fast enough, they started to panic. This event comes after Netflix reported lower-than-projected subscriber additions for the final quarter of 2021, its share dropping nearly 20 percent.

This is the lowest-ever drop for the company's stock since June 2020. In the last quarter, Netflix forecast to report 222.06 million paid subscriptions at the end of last year. Instead, the company reported yesterday that it ended the fourth quarter with 221.84 paid memberships.

Even though it is a little closer to the target, investors are worried about Netflix, which is already one of the biggest streaming companies out there. Supposedly, they can find new ways to continue to grow.

According to Netflix's own forecasts, subscriber growth will also be low in the next quarter. The company expects to add 2.5 million subscribers in the first quarter of 2022, down from 4 million in the same period last year.

From that alone it can be seen that there are still a lot of people coming and paying for Netflix. Revenue grew 16 percent year-over-year, and paid memberships grew 9 percent year-over-year. Netflix is still developing, it's just doing it gradually. Both customer and revenue growth have been low points for anxious investors, especially in the US, the company's biggest market.

“While retention and engagement remain healthy, acquisition growth has not accelerated back to pre-COVID levels. We think this may be due to several factors including the ongoing Covid outbreak and macroeconomic difficulties in some parts of the world such as (Latin America)," Netflix said.

Oddly enough, Netflix hasn't had much to say about the recent price hikes in the US. Instead, they've instead focused on the recent Play Something feature as an example of how the company adds value to its users.

Launching CNBC via The Verge, Friday, January 21, ahead of the earnings report call, the company also appears to have first allayed investor concerns about increased competition over the past two years.

"While this additional competition may affect our marginal growth, we continue to grow in every country and region where this new streaming alternative has been launched," Netflix said.

“This reinforces our view that the biggest opportunity in entertainment is the transition from linear to streaming and that with less than 10 percent of total TV viewing time in the US, our largest market, Netflix has tremendous room for growth if we can continue to improve our quality. " he added.

Perhaps Netflix's bigger concerns such as its growth and registrations slowing even as Netflix premiered its two most-watched films, Red Notice and Don't Look Up, didn't even affect subscriber growth.

To keep investors cool, Netflix will have to start accounting for its sluggish growth, or at least find some creative ways to move forward against its competitors, perhaps by lowering subscription prices.