In 2020, Netflix was one of the big winners from the pandemic as the streaming service soared to more than 200 million paying subscribers. Now that the lockdowns are over and the world is opening up again, it is suffering from Covid-related “lumpiness” as membership growth slows.
The California-based company missed its growth projections in the second quarter of 2021, adding just 1.54 million new subscribers. That was below the 1.75 million analysts predicted and “a fraction of the ten million added in the second quarter of last year,” reports The Guardian.
In the second quarter, Netflix revenue rose 19% year-over-year to $ 7.3 billion (£ 5.35 billion), while operating income rose 36% year-over-year to $ 1.8 billion. GBP) rose. It also ended the quarter with more than 209 million paid memberships, slightly ahead of forecast, and received 129 Emmy nominations for hit shows like The Crown, Bridgerton, and The Queen’s Gambit.
However, Covid has created some “clumps in our membership growth” [higher growth in 2020, slower growth this year]that works its way, “said Netflix in a letter to shareholders. The pandemic “chopped off” our growth somewhat and skewed year-over-year comparisons as acquisition and engagement per member household increased in Covid’s first few months.
Lack of new hit shows
The FT reports that registrations have “stalled” in the US, Netflix’s largest market, “where most of the Covid restrictions have been lifted.” Covid-related production delays in 2020 also resulted in a “lighter first half of 2021 that will build up over the course of the year,” Netflix said.
Research by Parrot Analytics found that Netflix’s share of global demand fell below 50% for the first time. In a press release, Parrot Analytics said that “the lack of new hit original programming and increased competition from other streamers will ultimately have a negative impact on subscriber growth and retention.”
Play on for Netflix
So what is Netflix planning to attract new members and keep its audience? It’s about the “entry into gaming”, which will be mobile-focused and free for subscribers, says Austen Goslin of Polygon. “While it remains to be seen whether or not Netflix can enter the mobile game market, it is already clear that its members value games very much.”
Netflix confirmed media coverage of the move, saying it is in the “early stages of further expansion into games” and will build on previous interactivity efforts such as Black Mirror Bandersnatch and the Stranger Things games.
“We see gaming as another new category of content for us, much like our expansion into original film, animation and unscripted television,” the company said. “As always, we’re excited about our offering of movies and TV series and anticipate a long way to go in increased investment and growth in all of our existing content categories, but since we’ve been creating original programming for nearly a decade, we think the It’s time to learn more about how our members value games. “
As a “first big step beyond TV shows and movies,” Netflix’s expansion into video games led the company to hire Mike Verdu to lead the effort, reports Bloomberg. Verdu, a former manager of Electronic Arts and Facebook, is joining Netflix as Vice President of Game Development.
“This feels like a major event with far-reaching implications for the entire video game landscape,” said Citi analyst Jason Bazinet.