Netflix saw an increase of over 1,5 million in its total subscribers in the second quarter of 2021, reaching a total of 209 million worldwide. But this came amid worrying news: the loss of around 430 users in the US and Canada, the platform's base markets.
The company is seeing a slowdown in its user base growth. In the first quarter of 2021, it predicted that it would add 6 million new users to its subscriber base, but the actual number of 4 million was 33% lower than estimated. For the third quarter of 2021, the forecast is 3,5 million net subscriber additions, a number considered modest. For Spencer Neumann, CEO of company, COVID-19 has been a crucial factor in the difficulty of predicting positive numbers for the streaming platform. The economic effects of the ongoing pandemic have forced subscribers to decide whether to keep their subscription in the face of the need to contain expenses, is the official position.
Winning in the world, losing at home
In terms of growth, the Asia-Pacific region led the way, with over 1 million subscribers. In terms of revenue, Netflix delivered US$7,3 billion now (to give us an idea in our currency, it would be around R$38,3 billion today, 21/07), compared to US$7,16 billion in the first quarter of this year. The company's margins increased in a period in which it spent less on marketing and content. The platform's revenue is around US$14,54 per user in the US and Canada and less than US$10 in Latin America and the Asia-Pacific region.
One factor in Netflix’s slowdown in its user base in the U.S. and Canada has to do, the company itself says, with increased competition from other in-demand entertainment apps and services, such as TikTok, Epic Games and YouTube. In a race to entertain consumers around the world, Netflix has been competing for screen time with a wide range of companies.
The cancellation of fan-favorite shows could be another reason for the platform’s slowdown in paying viewers. In 2021 alone, 10 TV series were canceled, including The Irregulars of Baker Street and Jupiter’s Legacy. Coincidentally or not, Netflix lost subscribers in one of its key territories in the same quarter that it canceled shows with strong followings.
Despite this, the platform says it is confident that it will continue to grow, in line with its recent years. The company expects a return to more normalized film and TV production and an increase in the cadence of originals later this year, helping to return to growth.
Focus on mobile
Even with negative numbers in the US and Canada, Netflix continues to boost international markets, for example, by experimenting with cheaper plans. just for one cell phone per subscriber. This initiative that started in 2019 in India comes being expanded to more regions, as the company notes that the plan for only one mobile device (such as a cell phone or tablet) has been an effective way to introduce more consumers to its streaming service. This type of option does not yet exist in Brazil.
At the same time, Netflix is also beginning to explore other lines of business, including merchandising, live events and video games. Last week, the company announced that it has hired Mark Verdu, a former Facebook and Electronic Arts executive, to be vice president of game development for its platform. In its earnings report, Netflix expanded its ambitions in this segment, with plans to start focus on mobile games, at no additional cost to subscribers.
Through which channels you reach those people, classic and out of the box. TechRadar e The Hollywood Reporter
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