Netflix‘s added 2.2 million subscribers in the last quarter, a slowdown after starting the year with eye-popping growth in the pandemic that the company initially predicted wouldn’t last.
, the world’s dominant streaming-video subscription service, said subscribers rose by 2.2 million to 195.15 million between July and September, according to its Tuesday report for third-quarter results.
That falls short of Netflix‘s July guidance to add 2.5 million new members. And analysts had been expecting a beat, with an average estimate of 3.4 million member additions, according to Thomson Reuters.
Netlfix shares were down 4.8 percent at $25.42 after hours.
Netflix started the year by adding more customers in a single quarter than it ever had before, kicking off record growth in the first half as COVID-19 precautions devastated swaths of the out-of-home entertainment industry. With movie theaters are shuttered, big-budget films pushed back to next year or later, sports only recently ratcheting back up, and concerts and theater largely on hiatus, Netflix’s domination of subscription streaming put it in prime position to attract still more members.
But Netflix had warned twice already its growth early in the year was likely pulling forward new subscribers that it would have normally booked in the back half.
Tuesday, it said that quarter-to-quarter fluctuations in its membership growth aren “not that meaningful” in the context of a massive shift to internet entertainment, which Netflix said it believe “is still early and should provide us with many years of strong future growth.” It also noted Tuesday that the pandemic continues to make projections “very uncertain” but the company is hopeful that its growth trends next will smooth out to something more normal.
In the pandemic, Netflix had a natural advantage as an at-home entertainment option, but the company also benefited from the binge-it-all-at-once release model it trailblazed. Netflix typically wraps its projects earlier than traditional TV studios do, since it needs to drop all episodes of a season at one, meaning it already had more of its gigantic production slate in the can before film and TV production largely shut down globally. As a result, Netflix still plans a steady cadence of new programming through 2020 and into next year.
Netflix said Tuesday that it expects to be releasing more titles every quarter of 2021 compared to the year-earlier period. It said it has restarted production on some of its biggest titles, including season four of Stranger Things, action film Red Notice starring Dwayne Johnson, Gal Gadot and Ryan Reynolds, and the second season of The Witcher.