[Asia Economy Reporter Joselgina] Netflix has surpassed 200 million paid subscribers worldwide, marking another major milestone. This growth is attributed to the surge in demand for online streaming services (OTT) over the past year, driven by the increase in so-called 'homebodies' following the COVID-19 pandemic. However, Netflix expects the number of new subscribers to shrink starting from the first quarter of this year.
According to IT media outlet The Verge and others, Netflix announced on the 19th (local time) along with its earnings report that the total number of global paid subscribers last year reached 203.6 million. This surpasses the 200 million mark for the first time since it broke 100 million in the third quarter of 2017.
Quarterly, 8.5 million paid subscribers were added in the fourth quarter of last year alone. Although this does not reach the 15.8 million added in the first quarter of last year immediately after the COVID-19 pandemic, it far exceeds the market forecast of 6.47 million for the fourth quarter. As of the third quarter of last year, Netflix's global paid subscriber count was 195.15 million.
Netflix expects that the rapid subscriber growth seen last year will not continue this year. Reed Hastings, Netflix's founder and CEO, previously warned that since many people worldwide who had not used OTT services joined Netflix all at once, the trend of net subscriber growth would not be strong going forward. The sharp decline in net additions in the third quarter of last year clearly supports this. At that time, about half of the new subscribers were from the Asia-Pacific region, including Korea and Japan, and foreign media reported that if it were not for the Asia-Pacific region, Netflix's performance would have been much worse.
The Verge stated, "OTT competition is fiercer than ever," and diagnosed that "although Netflix holds the OTT throne, it will not be as easy as before." Economic media CNBC also reported, "Netflix had to compete with Apple TV Plus, Discovery Plus, Disney Plus, HBO Max, Peacock, and others in the fourth quarter of last year," adding, "Disney Plus had an incredible year, securing 87 million paid subscribers in its first year of service."
It is also interpreted that the fact that one in four OTT subscribers tends to cancel existing services to subscribe to other OTT services could threaten Netflix's throne in the future. According to a Deloitte survey, 62% of those who subscribed to an OTT service to watch specific content unsubscribed after the content finished airing.
Netflix is also focusing more on content in consideration of this. In a letter to shareholders, Netflix emphasized, "Our strategy is simple," and stated, "If we improve Netflix every day to provide better enjoyment to subscribers, we will be their first choice in streaming entertainment." Earlier, Netflix raised its main subscription fees in the U.S. and announced plans to release at least one movie per week thereafter.
Meanwhile, Netflix's fourth-quarter earnings per share disclosed that day were $1.19, falling short of the forecast of $1.39.
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