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Netflix Badly Misses Q1 Subscriber Targets, Posts Worst First Quarter Since 2013

Derek Walborn

“Are you still watching?” Netflix may need to ask that question with a little more urgency these days. Its first-quarter numbers were a huge, huge miss on expectations with paid subscribers topping out at 207.6 million for the first three months of 2021. That’s more than 2 million below expectations. The first quarter of 2021 saw the streamer add just 450,000 subscribers in the U.S. and Canada. The biggest growth came in Europe, the Middle East and Africa (EMEA), with 1.81 million net additions.

For now, the narrative you’ll hear is that Netflix has plateaued.

In its letter to shareholders, the company explained, “We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays.”

This was Netflix’s worst first quarter since 2013, when the company added about 3 million customers.

As you can see, Q1 of 2020 blew expectations out of the water as stay-at-home regulations kept people glued to their devices and tuned in, allowing the company to surpass 200 million viewers worldwide. Data does show that Netflix excels at keeping those viewers coming back for more.

Heavy is the head that wears the crown, however, and recent competitors have been circling in the water, creating their own branded content in efforts to take a bite out of Netflix’s market share.

HBO Max has earned a spot on the top ten most downloaded apps this month, due in no small part to its deal to premiere all of Warner Bros.’ 2021 planned theatrical releases on the platform. The recent debut of “Godzilla vs Kong” has resulted in the platform experiencing a surge of viewership, and with upcoming big name entries like “Dune,” “The Matrix 4,” and DC’s “The Suicide Squad” still in the pipeline, one can assume that HBO Max will continue to claim significant growth throughout the rest of the year.

However, the relationship between Warner Bros. and HBO Max as we look past 2021 remains uncertain with both parties sure to reassess the terms of the deal once theatrical releases become viable again. Without the security of exclusive Warner Bros. blockbusters, HBO Max will have to continue to enrich its library with successful properties like “Game of Thrones” and “Last Week Tonight with John Oliver.” Recent surveys suggest that it will be an uphill battle as the majority of viewers express that they feel Netflix has the strongest original content.

Amazon Prime Video has also joined the 200 million global subscribers club and is the second largest streaming service behind Netflix. While Prime Video may have a bit of a trick up its sleeve being that the e-commerce behemoth’s Prime shipping service acts as a Trojan Horse for the platform, it’s success with original programming like “The Boys” and its recent deals with the NFL and other major sports properties point to some serious long-term strategies unfolding. It appears that Amazon may be positioning itself to be the de-facto streamer of live sports.

Disney+ has also been gaining momentum thanks to new fan favorites like “The Mandalorian” atop legacy programming from Star Wars, and the Marvel Cinematic Universe. The platform has also premiered Pixar’s “Soul” and has recently revealed that Marvel’s “Black Widow” will launch for streamers at the same time as its limited theatrical release. With Disney’s ever growing roster of iconic properties as well as its ownership of Hulu and ESPN, Disney+ looks to have its sights firmly set on possibly dominating streaming entertainment by 2024.

However, with Netflix already having a lead when it comes to the new frontier of nurturing international programming and viewership thanks to hits like “Dark” and “Narcos,” the company still looks to be in an excellent position to continue its reign well into the next few years. Netflix continues to reach into its wallets, pumping cash into productions in Japan, Korea, and more as the competitors jostle to keep up and maintain ground.

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