Despite producing global hits like “Squid Game” in 2021, Netflix fourth quarter returns show the streaming giant struggling to maintain a lead over its competitors. The company fell short of its projections for new subscribers this quarter, adding 8.3 million as opposed to the projected 8.5 million – it also projects adding just 2.5 million subscribers in Q1 2022, down from 4 million for the year. (the company says this is because it has “a more thoughtful backend content list” for the quarter). Overall, this year marks a downward trend in subscriber growth – it’s the company’s slowest growth year since 2015 and a reduction of about 50% from the numbers inflated by the 2020 pandemic.
“Consumers have always had plenty of choice when it comes to entertainment – competition that has only intensified in the last 24 months as entertainment companies around the world develop their own streaming offering,” the company wrote in its statement. letter to shareholders, admitting that “competition may be affecting [its] no marginal growth.”
While Netflix has around 222 million total subscribers, larger conglomerates like Disney (which also owns Hulu and ESPN) have continued to expand at a more aggressive pace. Disney ended 2021 with 179 million total subscribers on Hulu, Disney+ and ESPN+, and plans to double the number of countries where Disney+ is available by fiscal 2023. Consumer streaming internationally. HBO Max is also growing – the company said that December was the most viewed month since launching the service in May 2020.
Netflix announced last week that it plans to raise subscription prices in the US and Canada, while in India the platform has lowered its prices to try to attract more consumers after six difficult years in the massive entertainment market. Netflix is also experimenting with another new revenue stream: gaming. The company recently acquired the Night School game studio and developed games based on its own IP, such as the hit show “Stranger Things”. If this week’s biggest tech stories tell us anything, it’s that gaming can be very profitable. As expected, Netflix says it will expand its game portfolio in 2022.
Another new avenue for Netflix to grow its subscriber base is in content marketing — the company launched a website called Tudum last month, hiring entertainment journalists and editors from publications like Allure, Vanity Fair and Bitch Media to share exclusive content about Netflix originals.