Netflix posted its fourth-quarter earnings report Jan. 20, meeting its own expectation to underperform in comparison to the growth the Los Gatos-based streaming service experienced between 2017 and 2020.
In a third-quarter shareholder letter, the company forecasted that it would add just 18 million total new subscribers by the end of 2021, less than half of the 37 million it gained in 2020 — and it hit that goal. Netflix attributed the deficiency to competition from other companies with streaming services, even as it lauded its 222 million paid memberships, which included 8.3 million paid net adds jin the fourth quarter, a number that fell short of expectations by approximately 200,000 subscribers. Additionally, the company touted its 19% year-over-year growth in revenue, earning a total $30 billion, while increasing its operating income 35% year over year to $6.2 billion.
After announcing an expected add of just 2.5 million subscribers in the first quarter of 2022 instead of analyst forecasts of 4 million, Netflix’s stock dropped more than 22% by the morning of Friday, Jan. 21. The report acknowledged that the company has only limited room for growth in the United States and Canada, its biggest region, which also explains Netflix’s recent subscription price hike to $15.49 per month for its standard plan, up from $13.99. The price of the company’s basic plan was also raised, from $8.99 to $9.99, as was its premium plan, which now costs $19.99 per month. The last time the company increased prices was October 2020.
Since switching its measurement tool for subscriber engagement to total hours viewed in October 2021, the company has continued to highlight its biggest titles. “The Witcher,” starring Henry Cavill, was Netflix’s top series title released in the fourth quarter with 484 million hours of viewing within its first 28 days on the service, with “Maid” and season three of “You” coming in second and third, with 469 million and 468 million hours watched, respectively. Its top feature films for the quarter were “Red Notice” starring Dwayne Johnson and Gal Godot, which generated 364 million hours of viewing in four weeks, and Adam McKay’s “Don’t Look Up,” starring Leonardo DiCaprio and Jennifer Lawrence, which had 353 million hours of viewing time in the 26 days between the end of 2021 and its Dec. 5 release.
