Netflix Inc (NASDAQ:NFLX) shares have continued to plummet following the announcement that the number of new subscribers is forecasted to slow down in the next quarter.
The company said it expects to add 2.5mln customers in the first three months of this year, compared with 4mln new subscribers in the same period last year and more than 50% below analysts' forecasts of 5.9mln.
Shares in the company slumped 25% on the news as the markets re-opened.
Netflix blamed the slowdown on the late release of content, such as the second series of Bridgerton and the time-travel film The Adam Project, which will be showing in March.
It also said the continuing impact of COVID-19 and economic harships in many parts of the world, including Latin America, may have weakened subscriber growth.
Netflix added 8.3mln customers in the fourth quarter of 2021, below its forecast of 8.5mln. The quarter saw the release of movies Red Notice and Don't Look Up and a new season of The Witcher.
Global subscribers grew by 18mln to 221.8mln in 2021, well below the 37mln new additions seen in 2020, when pandemic lockdown restrictions helped boost subscriber growth.
Netflix noted that intensifying competition in the streaming service market could affect future growth.
Rivals such as Disney, Amazon Prime and HBO are investing heavily in creating new programming to boost their share of the market.
"While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched," Netflix said in a letter to shareholders.
"This reinforces our view that the greatest opportunity in entertainment is the transition from linear to streaming and that with under 10% of total TV screen time in the US, our biggest market, Netflix has tremendous room for growth if we can continue to improve our service."
Earnings per share in the fourth quarter came in at US$1.33 compared with US$1.19 in the same period last year, beating analysts' forecasts for 82 cents.
Revenue at US$7.71bn was in line with expectations and up 16% on the final quarter last year.
In order to broaden its offering, Netflix launched mobile video games in November last year. It released 10 games and plans to expand its portfolio of games in the current year.