Netflix adds more than 8 million subscribers but predicts slowdown

Netflix added 8.3 million subscribers in the fourth quarter, raising its worldwide subscriber base to 222 million, the company said in announcing earnings Thursday.

The number was slightly off the 8.5 million that Netflix had forecast, but the 1.2 million subscribers added from the United States and Canada region reflected its strongest quarter there since the beginning of the pandemic. Most of the growth came outside the United States, as has been the case for the past few quarters.

For the first quarter of 2022, Netflix has forecast an additional 2.5 million subscribers, down from the 4 million it added during the same quarter of 2021. That news prompted the stock to drop in after-hours trading. Two of Netflix’s most highly anticipated projects — the second season of “Bridgerton” and “The Adam Project,” a film starring Ryan Reynolds — will debut at the end of the quarter in March.

Last week, Netflix said it was raising the monthly prices for all of its US subscription plans, with the basic service increasing to $9.99 and the standard plan to $15.49. (The basic plans allows the user to stream on one device in standard resolution, while the standard plan allows for two in high definition.)

The company last raised rates in October 2020, and its subscriber base continued to grow. This time, analysts expect the price increase will result in more cancellations but higher revenue.

“I do think that they have permission to take this price increase,” said Berna Barshay, an analyst with Empire Financial Research. “At $15.49 they are only 49 cents above HBO Max. There’s no reason they shouldn’t be the leader. Their quality at the top end is as good as anybody’s, and their quantity just outdoes anybody.”

The growth in the fourth quarter was fueled by a strong slate of content at the end of 2021. Films like “Red Notice” and “Don’t Look Up” became the most-watched movies in the company’s history, according to Netflix, and returning shows like “Cobra Kai” and “The Witcher” attracted viewers as well. “Squid Game,” which was released near the end of the third quarter, broke through globally in the fourth quarter, according to the streaming giant. Netflix said it had accounted for 1.65 billion hours of viewing time.

The company made $607 million in profit on $7.7 billion in fourth-quarter sales. Investors had been expecting $379 million in profit and $7.7 billion in revenue, according to S&P Capital IQ.

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