Netflix added less than 4 million customers in the first months of 2021 - and warns of a dramatic drop-off in new customer growth as the pandemic subsides

• Netflix added 4 million new customers in Q1, compared to the 6 million that analysts expected.
• The streaming giant said that slowdown will be more pronounced as pandemic restrictions ease.
• Netflix said it will add 1 million new customers in Q2.

Netflix missed its first-quarter subscriber target, adding less than 4 million new customers compared to analysts' estimates of 6 million.

The streaming giant said it finished Q1 2021 with 208 million paid memberships, according to its shareholder letter released in tandem with its first-quarter earnings report. That number is up 14% year-over-year but is under what was expected to be 210 million paid memberships. The company said the missed subscriber target is due to the COVID-19 pandemic.

"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," the company wrote in the shareholder letter.

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Netflix saw record new users throughout 2020 as people, driven into their homes, sought social distancing-friendly means of entertainment. But the platform, as well as other streaming services, has seen a dip in original content - down 12 % from last year - in recent months since production was stalled in 2020 due to safety protocols. Netflix said membership growth has slowed because there were fewer programs to debut.

However, Netflix said it anticipates a "strong second half with the return of new seasons of some of our biggest hits and an exciting film lineup."

Netflix also said it did not believe that competing streaming platforms played a role in the company's Q1 results and said it expects 1 million new paid memberships in the second quarter of 2021.

"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," Netflix said in the letter.

Netflix stock was down 10% after the company released its first-quarter earnings report.