Netflix was one of the main beneficiaries of the pandemic lockdown. Now subscriber growth has slowed down as the war between streaming companies intensifies.
Netflix reported 18.2 million new subscribers worldwide during 2021. That’s half the amount it gained during 2020, when lockdowns first spread around the globe, leaving millions at home needing something to entertain them. For the first three months of 2022, it only expects to gain another 2.5 million subscribers.
That’s despite the global success of Squid Game and movie Don’t Look Up. Both have resulted in millions of streaming requests in the last three months.
Why has Netflix stalled?
Aside from lockdowns ending, causing viewers to reconsider their subscriptions, additional factors are in play.
Inflation in numerous countries is forcing some customers to reconsider what they subscribe to, as they seek to cut back.
Additionally, new competitors including Disney+, HBO Max and Peacock are rolling out services around the world. The nature of streaming services mean viewers can pick and choose each month which services they want access to. Netflix is increasingly reliant on launching new hit series or movies that result in former subscribers reactivating their account. One way to ensure viewers don’t return for a month, binge and leave, is to drip-feed new episodes over several weeks.
However, Netflix is still optimistic that it can continue to grow this year.
In a statement, the company said:
“Consumers have always had many choices when it comes to their entertainment time – competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering. While this added competition may be affecting our marginal growth, we continue to grow in every country and region in which these new streaming alternatives have launched.”