According to the latest earnings report, Netflix has grown by 8.8 million subscribers in the fourth quarter of 2019. This earning puts it ahead of its predicted subscribers of 7.6 million.
The company states that it has around 167 million memberships worldwide. Moreover, it has over 100 million subscribers outside the U.S. It also showed stronger-than-expected financials. The Netflix revenue was $5.47 billion, and earnings per share were $1.30. This is more than the predicted estimates of $5.45 billion, with an EPS of 53 cents.
Netflix has obtained 8.8 million subscribers, despite the launch of two popular streaming services, Apple TV+ and Disney+. Moreover, there was more competition from NBCUniversal’s Peacock and WarnerMedia’s HBOMax.
Netflix mentioned the intense competition in a letter to its shareholders and argued that there is a lot of room for several services to grow as the TV viewership drops. The company also noted that during Q4, its viewing membership increased globally in the U.S. every year, which is consistent with the recent quarters.”
Netflix also pointed towards the Google Search Trends and showed that there was a higher level of interest in Netflix’s original series “The Witcher,” in comparison to Apple TV+’s “Morning Show or Disney+’s’ “Mandalorian.”
This might seem like an unfair comparison because Disney+ is available in only a few countries. However, Netflix argues, “If Disney+ were global, the results would have been the same.” Yet, Netflix has to be wary of its competitors. Another emerging competitor in the market is Plex, which recently launched its streaming service in over 200 countries.
Netflix argues that “The Witcher” is going to have the biggest season 1 of any TV series ever. Over 76 million households watched the show. It also adds that around 83 million households watched the famous film “6 Underground.”
Netflix is changing the way it reports the overall viewership. It previously shared the accounts that watch around 70% of the film. However, now it mentions the members who choose to watch the show for two minutes. The company also states that this viewership increases the overall count by 35%.
“We are using a similar method to the BBC iPlayer in their rankings, and the YouTube view counts,” says Netflix. “Through this way, the short and long titles are treated equally. Moreover, there is a level playing for every content type, including the interactive content.”
A dark cloud in the earnings report is slowing growth with around 7.0 million additions in Q1, compared to the 9.6 million additions in the first quarter of 2019. Netflix says that these elevated levels in the U.S. are due to the timing of last year’s price changes.
