SAN RAMON, Calif. (AP) — Netflix’s rapid subscriber growth is slowing far faster than anticipated as people who have been cooped at home during the pandemic are able to get out and do other things again.
The video-streaming service added 4 million more worldwide subscribers from January through March, its smallest gain during that three-month period in four years.
The performance reported Tuesday was about 2 million fewer subscribers than both management and analysts had predicted Netflix would add during the first quarter.
It marked a huge comedown from the same time last year when Netflix added nearly 16 million subscribers. That came just as governments around the world imposed lockdowns that created a huge captive audience for the leading video-streaming service.
Signaling that the trend is continuing, Netflix forecast an increase of just 1 million worldwide subscribers in its current April-June period, down from an increase of 10 million subscribers at the same time last year.
The poor showing to start the year rattled investors, causing the Los Gatos, California, company’s stock to drop nearly 10% in extended trading.
The inevitable slowdown in subscriber growth had been widely telegraphed by Netflix’s management in repeated reminders that its gains were a pandemic-driven anomaly.
Now that a large swath of the population has been vaccinated, people are able to move around more freely and finding other diversions besides watching TV series and movies on Netflix.
The big question is how big this year’s drop will be from last year’s full-year increase of 37 million worldwide subscribers — by far the biggest since Netflix expanded its DVD-by-rental service into video streaming 14 years ago.
Netflix management sought to reassure investors in a letter that predicted subscriber growth would improve during the second half of the year as more TV series and movies that had to be delayed during the pandemic are finished and released.
But what happened during the first quarter is a indication Netflix may be headed toward a lackluster year. The last time Netflix started a year with a lower gain — 5.3 million subscribers in the first quarter of 2017 — the service ended up with an annual increase of 21.6 million subscribers.