Netflix: COVID-19 Pandemic Causes 'Lot of Bumpiness' in Projection, Executive Says

- 21 January 2022 20:22 WIB
Netflix has lowered its growth forecasts. (Unsplash/Thibault Penin)
Netflix has lowered its growth forecasts. (Unsplash/Thibault Penin)

JAKARTADAILY.ID - Netflix shattered prospects for a speedy return on Thursday by projecting dismal first-quarter subscriber growth, pushing shares down roughly 20 percent and wiping out the majority of its lingering pandemic-fueled profits from 2020.

Reuters reported today (January 21, 2022) that Netflix stated in a letter to shareholders about the ongoing COVID-19 pandemic, as well as economic challenges in certain parts of the globe, such as Latin America, may have prevented subscriber growth from returning to pre-pandemic levels.

According to Co-Chief Executive Ted Sarandos, the pandemic "created a lot of bumpiness" that made projecting subscriber numbers difficult, "but all the fundamentals of the business are pretty solid.”

Refinitiv IBES statistics show that the world's largest streaming service expected to attract 2.5 million members from January to March, less than half of the 5.9 million analysts predicted.

Netflix has lowered its growth forecasts, noting the delayed release of anticipated content such as the second season of "Bridgerton" and Ryan Reynolds' time-travel film "The Adam Project."

The company reported adjusted earnings per share of $1.33, much exceeding analyst prediction of 82 cents. Revenue came in at $7.71 billion, which was in line with expectations.

Last week, Netflix raised rates in its largest market, the United States and Canada, where experts estimate growth is stagnant, and is now seeking for development outside of North America.

The firm is searching for innovative ways to lure customers, and one of them is through mobile video games. Netflix announced that it would release ten games in 2021, was delighted with the early response, and would extend its gaming portfolio this year.

Editor: Djauhari Effendi

Source: Reuters

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