Analyst: Netflix ‘pandemic boom’ over

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Ampere Analysis expects Netflix to report its lowest number of new subscribers in the first quarter for four years later this week, perhaps signalling the end of the Covid-19 home entertainment boom.

The first quarter is traditionally the strongest for new Netflix sign-ups, with viewers in key markets (ie North America and Europe) spending more time at home during the winter. However, this year Netflix is forecasting 6 million new Q1 subscribers, the lowest since 2017, and significantly down on the near 16 million sign-ups in Q1 2020.

“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,” said Richard Broughton, analyst at Ampere, speaking to The Guradian.

“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,” he continued.

Last year was the most successful in Netflix’s history with a record 36.6 million new subscribers joining the service amid global lockdown restrictions, pushing it past 200 million subscribers.

“If Netflix’s numbers do come in as predicted they will be the lowest for a good few years,” said 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’s Q1 numbers are due on April 20th.


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