Netflix stock fell around 5% in after-hours trading Tuesday after the company posted slowing growth in new subscriptions and lower-than-expected profits, a sign that the streaming giant’s pandemic bump may be petering out.
Netflix has thrived in 2020 as people were stuck at home during the global health crisis. The company posted colossal subscriber gains over the past two quarters, which helped drive its stock up nearly 70% this year. But there have been questions about whether it can continue that momentum, especially as competition from other streaming providers ramps up. New subscriber growth falls The company attributed the slowing growth in new memberships during the third quarter to its “record first half results” — suggesting that because so many new customers subscribed during the earlier months of the year, fewer were left for the third quarter. Netflix had initially expected to add 2.5 million new paid memberships during the quarter. However, it noted that it has added 28.1 million paid memberships during the first nine months of 2020 — more than the total number of new paid memberships in all of 2019. Netflix also said that “retention remains healthy and engagement per member household was solidly up year over year” during the quarter.
