Netflix reported its worst quarter in 8 years, where it added only a few customers in Q1 of 2021. The company blamed the COVID-19 breakout last year for this dismay. Though the pandemic gave record-breaking new subscribers to the platform, it led to halting down many productions, thus leaving no new content to Netflix this year.
Netflix Blames COVID-19 Breakout For Fallen Growth
The last year’s pandemic has had a severe impact on brick-and-mortar stores, and other businesses that need people going out. These include the movie production houses that need artists to travel and perform and release them on various platforms. As these businesses halted, companies like Netflix relying on them are suffering now.
As per reports, Netflix has added just 3.98 million subscribers in the first quarter of 2021, after gaining over 15 million in the same period last year. This sudden slump was way below the analyst’s estimates of 6.29 million, and even its own forecast of 6 million. This is said to be the weakest start since 8 years, where it added 3 million new subscribers in Q1 of 2013.
Netflix called this as COVID-19 pull-forward effect, where the lockdowns last year helped thrive it rapidly in a short span, and halted all of sudden. Apart from this, Netflix also mentioned the halting of production of new content due to COVID-19, which has now left very few shows to stream.
As people are looking out for new content, Netflix pledged to spend more than $17 billion this year on new content making alone. This is a significant level up from previous years and could help Netflix maintain its market production. It’s unusual that Netflix blamed the competition, which has been growing steadily since last year.
Players like Amazon Prime, Disney Plus, Peacock, etc are preying on new and trending content, and stand neck to neck against Netflix. Yet, Netflix is spending huge amounts on new shows procurement to maintain its position.