Netflix reported its subscriber base grew to 222 million in 2021, missing projections, as it sees interest from newcomers waning compared to the previous Covid-19-induced surge.

The world’s largest streaming video service said it added 18.2 million subscribers in total last year, which is about half the number that came onboard in 2020.

Further, Netflix forecast adding just 2.5 million customers in the first quarter, compared with analysts’ expectations of 6.26 million additions. The service added 4 million in the same period a year ago.

The news sparked an investor selloff on the day.

In a letter to shareholders, Netflix said: “We achieved several milestones in 2021: we had the biggest TV show of the year (Squid Game), our two biggest film releases of all time (Red Notice and Don’t Look Up) and Netflix was the most Emmy-winning and most nominated TV network and the most Oscar-winning and nominated movie studio of 2021. Full year revenue of $30 billion grew 19% year over year while operating income of $6.2 billion rose 35% year over year. We finished Q4 with 222 million paid memberships (with 8.3 million paid net adds in Q4). Even in a world of uncertainty and increasing competition, we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world. We’re continually improving Netflix so that we can please our members, grow our share of leisure time and lead in this transition.”

The forecast was said to reflect a more back-end-loaded slate of new content for the period. It is planning to release in March popular new programming including Bridgerton Season 2 and a new original film The Adam Project.

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Netflix attributed part of its results to Covid-related hangover factors impacting macro-economic hardships in various regions it serves, such as Latin America.

The company has also seen more intensified competition in new content releases from big SVOD service rivals.

“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,” the company added. “While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched.”

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By Greg Tarr

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