Reed Hastings, co-CEO of Netflix, participates in the Milken Institute Global Conference on October 18, 2021 in Beverly Hills, California.
Patrick T. Fallon | AFP | Getty Images

The latest Netflix shareholder letter included a line heard around the world:

“While this added competition may be affecting our marginal growth some…”

That clause doesn’t sound like much, but it’s Netflix’s strongest admission so far that streaming competition is affecting its subscriber growth.

Typically in Netflix’s competition section, the company claims Netflix competes against many different things (sleep! TikTok!), but other streaming services don’t pose much of a threat. Netflix has routinely argued there’s more than enough streaming viewing time to go around. It did again this quarter, noting that Netflix is still less than 10% of U.S. television screen time.

But acknowledging, even somewhat subtly, that competition is affecting Netflix’s subscriber additions is a uniquely bold declaration for the company, said Michael Nathanson, a media analyst at MoffettNathanson. It’s a signal the streaming giant is finally feeling some competitive affects of other services such as Disney+, WarnerMedia’s HBO Max, ViacomCBS‘s Paramount+ and NBCUniversal‘s Peacock.

“They have usually dismissed it as a blip,” said Nathanson of rival streamers.

Competitive pressure is particularly important in the U.S. and Canada, where Netflix just raised prices last week, including bumping its standard plan from $13.99 per month to $15.49. If competition is truly starting to erode some growth, it increases the risk that a price hike could increase churn.

Netflix’s content is still in high demand. Six of the top 10 most searched shows globally were on Netflix in 2021, the company noted in its shareholder letter. It had the year’s biggest hit in “Squid Game.”

But investors may be looking for more, leading to plummeting shares after the company forecast just 2.5 million subscribers for the first quarter of 2022, below the 3.98 million it added in Q1 2021.

Netflix’s price increase made its standard plan more expensive than HBO Max. Getting a reputation as the most expensive mainstream streaming service may not help with restarting growth.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

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