Streaming giant Netflix has released this year’s first quarterly earnings and has expectedly seen a massive jump in paid subscriber base. Netflix announced that it has managed to rake in double the number of paid subscribers it had previously predicted from January to March.
Video-on-demand platforms are one of those few businesses that have benefited from the ongoing pandemic and subsequent lockdowns. People have turned to OTT platforms in herds, keeping themselves entertained as they remain confined to their homes. The intensity of the user traffic can be gauged from the fact that streaming platforms had to cap the stream quality at Standard Definition (480p) to prevent any potential network infrastructure meltdown.
Netflix has managed to gain 15.8 million subscribers from January to March, which is twice of the 7 million it had predicted to add during the period. The latest additions peg the global sub count at 182.9 million. While the pandemic has been more than generous for the streaming platform, Netflix is certainly in no la la land, expecting the trend to subside once the lockdowns are lifted. The streaming giant expects fewer new paying subscribers from July to December as compared to previous years.
“We expect viewing to decline and membership growth to decelerate as home confinement ends,” Netflix said in a letter to shareholders.
The biggest contributor to the humongous jump in subscriber count is Europe, which accounts for 4.4 million new customers out of the 15.8 million.
Netflix has also managed to stay in the green when it comes to the stock market. While the general outlook of the market has been grim with stocks hitting record lows on more than one occasion in the past few weeks, Netflix has gained 11% in the same period. In contrast, the S&P 500 Index has fallen 19% from its Feb. 19 record high. Netflix’s earning per share though has fallen short of what analysts had predicted. The company posted diluted earnings per share of $1.57, below the $1.65 consensus, according to IBES data from Refinitiv.
Netflix doesn’t expect changes in the schedule for upcoming shows, given most of the programming for 2020, and much of 2021, has already been done and is in post-production as of now. But the going ahead certainly isn’t going to be as smooth, given the debut of Disney+ in the OTT scene. Currently, Disney+ offers its plans at almost half of what Netflix charges.