The pandemic was a boon for OTT platforms. Content consumption saw a quick rise as people were stuck inside their homes due to the lockdown. However, as vaccination drives continue, Netflix sees a dip in its users and shares. 

Netflix said slower production of TV shows and movies during the pandemic impacted the user base and hence, the shares are down by 11 percent on Tuesday. 

“It’s just a little wobbly right now,” Netflix co-CEO Reed Hastings said during a discussion of the company’s results. 

“It all boils down to COVID,” Spencer Neumann, Netflix’s chief financial officer said. 

While analysts had expected nearly 4.8 million new streaming customers in the second quarter, Netflix estimates that only 1 million new streaming customers will be added. The company projected membership growth after the announcement of new seasons of Money Heist, You, Witcher, and more. However, no such acceleration has been noted yet. Last year during the same time, there was an increase of 10 million subscribers. 

In 2020, Netflix approximately added a record 15.8 million customers but with people now willing to move out of their homes and comfortable couches, the progress is hindered. This has caused the company’s stock to go down by more than 8% in extended trading. 

“What wasn’t expected was the strength of the slowdown in international markets, where competition is significantly lower,” said eMarketer analyst Eric Haggstrom.

Analysts suspect that such a drip in the numbers might lead the management to change the pricing strategy of the company. The management however has reassured the investors that subscriber growth would improve during the second half of the year as there are upcoming projects lined up. 

Besides vaccination drives affecting the business, Netflix is also facing more competition than ever from a variety of online streaming platforms from major companies such as Disney, HBO, Discovery, and more. 

“There is this big runway of growth if we stay focused and keep getting better,” Neumann said.

By Team

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