Netflix Earnings Report Shows Lower Subscriber Growth

Netflix exceeded earnings estimates in the first quarter of 2021. However, shares tumbled in after hours trading because the streaming service failed to add as many new subscribers as analysts had projected. Roughly 3.98 million people signed up for Netflix from January through March, below the 6.25 million average projection.

Competition in the streaming sector is growing, with AT&T’s HBO Max and Apple TV+, among others, offering original content just as Netflix does. Apple and AT&T have the ability to bundle content with mobile devices, which is harder for Netflix to do, though it partnered with T-Mobile US in the past.

Netflix’s subscriber slowdown may be less related to competition from other streaming services than it is to challenges from the real world, which is gradually becoming more accessible to people in many countries as they receive COVID-19 vaccines. During the early part of the pandemic, Netflix witnessed a huge surge in subscriber sign-ups, adding 15 million new accounts in one quarter. Now the company predicts net additions of 1 million in the current quarter.

For mobile network operators, Netflix represented a double-edged sword for many years. It encouraged subscribers to use mobile data when watching on the go, but also overrides mobile networks by using them for transport without paying operators. US operators have long been interested in capturing content revenue for themselves, with AT&T making the biggest bet on the media business among the three nationwide service providers.