Netflix expected to signal the end of the Covid TV streaming boom | Netflix

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Netflix is expected this week to report the lowest number of new subscribers in the first quarter for four years, signalling perhaps the end of the home entertainment pandemic boom.

For Netflix, which passed 200m subscribers last year as record numbers signed up to beat lockdown boredom, the first quarter is traditionally its strongest for new sign-ups, with families in key markets including North America and Europe looking to be entertained while stuck at home during winter weather.

However, this year Netflix is forecasting 6 million new subscribers, the lowest first-quarter increase since 2017, well down on the almost 16 million sign-ups in the first quarter last year, as lockdown restrictions ease.

“It is not quite the end of the pandemic effect for streaming services but we are beginning to see the tail end of it; it’s definitely on the wane,” says Richard Broughton, analyst at Ampere.

“Markets around the world are beginning to emerge from what we hope will be the final wave of the virus and unlock. Consumers are getting a chance to enjoy wider entertainment and leisure activities that have been unavailable to them during the bulk of the pandemic. Video services are ceding ground to activities such as seeing friends and family, some sport is back, the same with cinemas and retailers, beer gardens are open. Warmer weather affects TV viewing too.”

In the UK, which has experienced a gradual relaxation of lockdown restrictions starting in early March, the impact of pupils returning to school and people being allowed to meet outdoors and in private gardens has changed habits. Since the start of March daily visits to parks have at times increased as much as 60% compared with the pre-pandemic period in February last year, according to Google’s Covid-19 Community Mobility Trends.

The $340m (£245m) global box office take to date of blockbuster Godzilla vs Kong, following a number of big screen failures during the pandemic that raised questions over the long-term attraction of cinemas, has proved that there is a significant pent-up demand to get back out and enjoy activities taken for granted pre-coronavirus.

While Netflix founder Reed Hastings has said the company considers any activity that takes attention away from its services to be a rival – he once half-joked that sleep is its biggest competitor – the expected drop in new subscribers is unlikely to rattle investors and dent its $243bn market value.

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Last year, was the most successful in Netflix’s history with a record 36.6m new subscribers joining the service, with the pandemic hastening the rate of sign-ups of consumers who might otherwise have joined this year.

“If Netflix’s numbers do come in as predicted they will be the lowest for a good few years,” says Broughton. “But there has been a strong ‘pull forward’ of subscribers. Netflix went into the pandemic as the strongest service, and although there has been the arrival of very successful new entrants such as Disney+, it is in an extremely strong position now.”

Netflix is expected to spend about $19bn on making and buying TV shows and films this year, up from $17.3bn in 2020. Last week, Netflix ordered two more series of the period drama Bridgerton, which was viewed by 83m households in its first month on the service, and struck a ground-breaking deal with Sony Pictures to be the first service to show films such as the Spider-Man and Jumanji franchises after they appear in cinemas.

Hafta Ichi
Source: The Guardian
Keyword: Netflix expected to signal the end of the Covid TV streaming boom | Netflix

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