Los Gatos, California - Streaming market leader Netflix gained far fewer users than expected at the start of the year due to a lack of new hit movies and series. In the first quarter, the number of subscribers increased by only four million to just under 208 million, Netflix announced on Tuesday after the stock market closed.

The online video service missed its own target of around six million new customers and was clearly underwhelming as far as market expectations went.

Investors were left disappointed and let share values fall by more than ten percent in their initial reaction after trading hours.

However, Netflix did manage to boost revenue and pull in $1.7 billion in profits in the first fiscal quarter. This is around 140% more than a year ago, with revenues swelling 24% to $7.2 billion.

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But after the boom at the start of the coronavirus crisis, which brought Netflix record results the previous year, customer traffic has dropped off sharply.

Pandemic-related production problems have ostensibly prevented the release of enough hit programming to draw new subscribers.

Netflix is also struggling with growing competition, particularly as Disney+ collaborates with various digital providers to offer its streaming service at a discount. Disney also has a number of older films and series hidden in its "vault", that it releases periodically to draw new nostalgic subscribers.