On the face of it, business is good for Netflix. Its revenues in the first quarter of this year were $7.16bn, up by 24.2% year-on-year, and it ended the quarter with 208m paid memberships (subscribers). However, the latter figure fell short of the company’s guidance forecast of 210m memberships, which points to challenges below the surface of the video streaming giant’s business.

“We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays,” is how Netflix explained it.

So, a slowdown in new show launches meant the service didn’t sign up as many new users (“retention in Q1 was in line with our expectations”) as it hoped. However, Netflix remains bullish about the longer term. “In the short-term, there is some uncertainty from Covid-19; in the long-term, the rise of streaming to replace linear TV around the world is the clear trend in entertainment…”

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