Digital streaming platforms gained a ton of traction around the world while everyone was locked at home during the COVID-19 pandemic. Amongst many popular ones like Disney+ Hotstar, HBO Max, and Prime Video, Netflix saw unparalleled growth and gained tens of millions of new subscribers when the pandemic was on the rise in early 2020. Well now, although the Coronovirus situation has not changed much this year, Netflix saw a drastic reduction of net new subscribers in 2021.
Drastic Reduction in Net New Subscribers on Netflix
As per the company’s recent earnings report, Netflix garnered only 4 million net new subscribers in the first quarter of 2021. This took its total subscriber base to 207.6 million. The OTT platform, however, gained a whopping 15.77 million net new subscribers during the same period in 2020. Hence, Netflix expected to reach the 210 million mark for its total subscriber base this year. Unfortunately, that did not happen.
Now, Netflix has acknowledged the fact and company executives have blamed the pandemic for causing production delays of their original shows. The company says that although the competition in the OTT scene has become a lot more intense with various new entries, the reduction of the net new subscribers is a result of fewer original shows and movies on Netflix.
“We believe paid membership growth slowed due to the big COVID-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to COVID-19 production delays,” the company said in a statement.
“We continue to anticipate a strong second half with the return of new seasons of some of our biggest hits and an exciting film lineup. 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,” added the company.
Going into the second quarter of 2021, Netflix has a low expectation of just 1 million net new subscribers as the production delays are expected to continue. However, the company expects to pick up the pace in the second half of the year by renewing some of the most anticipated titles on the platform. Moreover, Netflix says that productions have already resumed “in every major market, with the exception of Brazil and India.” Beebom