Although Netflix produced global hits like “Squid Game” in 2021 Fourth Quarter Returns show that the streaming giant is struggling to stay ahead of its rivals. The company fell short of its guidance for new subscribers this quarter, adding 8.3 million versus the 8.5 million forecast — it also forecasts adding just 2.5 million subscribers in the first quarter of 2022 versus 4 million last year (the company says that’s because it has “a more backward-weighted content list” for the quarter). Overall, this year marks a downtrend in subscriber growth — it’s the company’s lowest-growth year since 2015 and about 50% decrease from 2020 pandemic-related numbers.
“Consumers have always had many options when it comes to their entertainment time – a competition that has only intensified over the past 24 months as entertainment companies around the world develop their own streaming offerings,” the company wrote in its Letter to Shareholders, acknowledging that “competition could have an impact [its] some marginal growth.”
While Netflix totals about 222 million subscribers, larger conglomerates like Disney (which also owns Hulu and ESPN) are expanding at a more aggressive pace. Disney ended 2021 with 179 million total subscribers across Hulu, Disney+ and ESPN+ and plans to double the number of countries where Disney+ is available by fiscal year 2023. Disney also announced the formation of an International Content and Operations Group to expand its direct-to-consumer streaming internationally. HBO Max is also growing, the company said December was the most watched month since the service launched in May 2020.
Netflix announced last week that it plans to do so increase subscription prices in the US and Canada, while in India the platform lowered its prices trying to attract more consumers after six difficult years in the huge entertainment market. Netflix is also experimenting with another new revenue stream: Play. The company recently acquired the game studio night school and has developed games based on his own IP, such as the hit series Stranger Things. If this week’s biggest tech stories tell us anything, it’s this Gaming can be very lucrative. As expected, Netflix says it will expand its portfolio of games in 2022.
Another new avenue for Netflix to grow its subscriber base is through content marketing — the company launched a website called Tudum Last month, entertainment journalists and editors from publications like Allure, Vanity Fair and Bitch Media were hired to share exclusive content about Netflix Originals.