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Hit by COVID slump, Netflix pledges to spend $17 billion on content this year

Netflix executives went out of their way to argue that the slowing growth wasn't the result of increased competition from other streaming services.

Hit by COVID slump, Netflix pledges to spend $17 billion on content this year

Last year's lockdown-fueled subscriber growth led to a "pull forward" effect, executives argue.

Image: Netflix

Netflix experienced a massive deceleration in growth in the first quarter, adding just 4 million new subscribers worldwide — 2 million fewer than the company had previously forecasted. Netflix ended the most recent quarter with a total of 207.6 million subscribers.


Executives blamed the miss on COVID, writing in their letter to investors that last year's lockdown-fueled subscriber growth led to a "pull forward" effect. They also argued that production shutdowns resulted in a lighter content slate in the beginning of the year, but suggested that this would even out in the second half of 2021. Altogether, Netflix aims to spend $17 billion on content this year.

Netflix executives went out of their way to argue that the slowing growth wasn't the result of increased competition from streaming services like Disney+ and HBO Max, and implored investors to take a closer look at the competition. "When comparing services, subscriber figures alone tell only part of the story [given bundles, discounts and other promotions] so it's important to also focus on engagement and revenue as key indicators of success," they wrote.

However, Netflix investors weren't buying that narrative Tuesday afternoon; the company's stock price sank 10% in after-hours trading.

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