As new market realities slammed the streaming giant in the fourth quarter, Netflix stock lost more than a fifth of its value in Friday's premarket.

By March, the business expects to have added 2.5 million members, down from the 4 million it added in the first quarter of 2021. It has approximately 222 million users at the end of December.File:Netflix 2015 logo.svg - Wikipedia

The corporation added 8.3 million members in the quarter ending in December, falling short of its goal of 8.5 million.

After nearly two years of blistering expansion spurred by the epidemic, when home-bound consumers turned to stream video for amusement, the company is facing rising challenges. Netflix confronts the challenge of keeping members while recruiting new ones as more people return to work.

Competition has also knocked on its door, including Disney+, Discovery, Sony, and local players in overseas regions. Netflix has responded by lowering pricing in emerging regions like India and increasing its spending on content and technology. As a result, its operating margin fell to 8.2 % for the quarter, down from 14.4 % a year before.

It raised pricing in the United States and Canada last week, its most mature regions, where it still sees "tremendous opportunities for development."

Netflix blamed "ongoing Covid overhang" and economic hardship in numerous countries for its membership growth rates "not yet reaccelerating to pre-Covid levels."

Despite the low historical and expected subscriber numbers, some of the material – Squid Game, The Witcher, and You, to name a few – attracted a sizable following. Bridgerton, one of the company's biggest blockbusters, comes back this quarter. Revenue for the fourth quarter came in at $7.71 billion, which was in line with expectations. Profit per share was $1.33, up roughly 12% year over year.