Even the success of “Squid Game” in 2021 was not enough to add to Netflix subscriber rate. The streaming service is still struggling to get an advantage over its competitors. The company projected an increase in the number of subscribers this year. It expected an increase in its number of subscribers to 8.5 million in 2022. It predicted that it would add 2.5 million subscribers in Q1 2022.
This downward trend is the lowest growth the company has ever had since 2015. It is lower (due to the Pandemic) than its numbers in 2020. In 2020, the subscriber growth touched 35 million. Furthermore, it reduced to less than 20 million in 2021. This year the growth in Netflix subscriber rate is just around 2 million in the first quarter. If the trend continues, the popular streaming service might not touch even the 10 million mark by the end of the year.
In its letter to the shareholders, the company stated, “Consumers have always had many choices regarding entertainment. The competition has only increased in the last 24 months. Many entertainment companies worldwide have developed their streaming services.” Netflix, blames the competition for its low growth rate.
The Competition Is Tough
Netflix’s competitor, Disney, has increased its subscriber base. It had a good year with 179 million total subscribers. Even though, it is less than Netflix, which has 222 million subscribers, Disney plans to increase its subscriber base by adding new countries by fiscal 2023. It also plans to create international content to attract international viewers.
Another competitor, HBO Max, launched its services in May 2020. It showed an increase in subscriptions too. Last December was its most-viewed month.
The Negative Impact
After the news of slow subscriber growth went viral, Netflix saw a 20% plunge in its shares. For instance, it predicted an increase in 8.19 million however was able to achieve only 8.28 million net subscribers. Even this number is still less than 8.5 million in Q4 of 2020.
Netflix predicted to add 2.5 million in Q1 of 2022, but it is way below 3.98 million subscribers which it predicted. This lower subscription growth led to lower confidence of stakeholders.
A Step Forward
In US and Canada, Netflix has increased its Netflix subscriber rate. In addition, it has lowered its rates in India. It plans to target the massive Indian entertainment market. It also plans to add many new Korean shows to Netflix Originals in 2022
Not only entertainment Netflix is spreading its wings in the gaming zone too. It acquired the gaming studio Night schools. The streamer has developed many games based on shows such as Stranger Things. According to the entertainment gurus, gaming is a very lucrative business. Therefore, Netflix plans to expand its portfolio of games in 2022.
Moreover, the company is marketing its content. It launched a website Tudum. Netflix hired top entertainment journalists and editors from major publications such as Allure and Vanity Fair for exclusive content for Netflix Originals.