Netflix Tops 200 Million Subscribers for the First Time
Streaming giant said it added a record 37 million subscribers in 2020
Netflix’s continued subscriber growth comes
amid heightened competition from new streaming services including
Walt Disney Co. ’s Disney+,
Apple Inc.’s Apple TV+,
AT&T Inc.’s HBO Max and
Comcast Corp.’s Peacock, all of which weren’t around a little over a year ago.
The company got a boost from the coronavirus pandemic, which forced consumers to cut back on a host of leisure activities—from dining out and vacations to visiting theaters and concert venues—as economies locked down. With many people spending more time at home, streaming demand jumped.
While the majority of television networks continue to be without most of their original content because of production shutdowns due to Covid-19, Netflix’s well-stocked content arsenal lifted it to new heights. Netflix signed up what it said was a record 37 million subscribers in 2020 and had a total of 203.7 million users when the year ended—more than twice as many as it had a mere three years earlier.
And while Covid-19 continues to wreak havoc on movie and television productions, Netflix currently has more than 500 titles in post production or ready to launch on the platform, the company said. Last week, it unveiled a movie slate that will see a new release on the platform every week of 2021.
Netflix creates its content much further in advance than broadcast and cable channels, which allowed the company to be better prepared to offer fresh content when the pandemic struck—something other streaming services that were still in their infancy weren’t in a position to do.
Among the strong performers for Netflix was the racy historical drama “Bridgerton,” the miniseries “The Queen’s Gambit,” a new season of “The Crown” and the George Clooney movie “Midnight Sky.”
The company already has new successes in season three of “Cobra Kai,” a show it rescued from YouTube, and the French crime drama “Lupin,” which has quickly become one the most popular programs on the platform.
The company currently anticipates 2021 cash flow at break-even, an upgrade from its earlier projection, which was minus $1 billion to break-even. Netflix said it is considering returning some cash to shareholders through stock buybacks.
The Los Gatos, Calif., company said it generated $6.64 billion in fourth-quarter revenue, up from $5.45 billion for the year earlier and thus exceeding forecasts from analysts. But profit decreased to $542 million, or $1.19 a share, from $587 million, or $1.30 a share, the year earlier. Analysts predicted $1.36 a share for the latest period, according to FactSet.
For the quarter ended Dec. 31, Netflix added more than 8.5 million subscribers on a net basis, a gain that surpassed its forecast for the period.
The bulk of the company’s growth in 2020 occurred in the first two quarters, as Covid-19 and efforts to stop its spread transformed daily life in countries around the world. Subscriber gains fell, meanwhile, year over year in the latest period, a
decline the company had said it expected.
Netflix sent employees a bottle of champagne and confetti to celebrate surpassing the 200 million subscriber mark, according to a person familiar with the matter.
In October,
Netflix raised the monthly price of its most popular subscription plan, bumping up the cost of its standard streaming service, its most popular option, by $1 to $13.99. It still has a less-expensive basic offering, as well as a premium one now priced at $17.99 a month.
Netflix isn’t the only streaming service benefiting from the pandemic. Disney+ is already near 90 million subscribers since its launch in November 2019. The
company recently projected reaching 260 million subscribers world-wide by 2024.
Like Netflix, Disney+ also raised its monthly fee by $1 to $7.99 effective March 2021.
WarnerMedia’s new HBO Max streaming platform, which launched last May, hasn’t grown as fast as its rivals. However, the company
recently unveiled plans to release the entire slate of Warner Bros. theatrical movies on HBO Max simultaneously in the hopes of boosting subscribers. WarnerMedia is a unit of AT&T.
Comcast’s streaming platform Peacock, which offers a variety of price plans including a free option, has 26 million sign-ups.
The newest entries to the streaming wars include Discovery+ from Discovery Communications Inc., which launched earlier this month, and Paramount+ from
ViacomCBS Inc., which is scheduled to debut in March in the U.S., Canada and Latin America.
Competition is in part “why we have been moving so quickly to grow and further strengthen our original content library across a range of genres and nations,” Netflix said in its letter to shareholders.
“Our strategy is simple: if we can continue to improve Netflix every day to better delight our members, we can be their first choice for streaming entertainment.”
Netflix reported stronger subscriber growth in international markets in the fourth quarter than domestically, continuing a trend it has seen frequently of late. It added 860,000 subscriptions in the U.S. and Canada in the period, but gained two million subscribers in Asia, more than 1.2 million in Latin America and 4.5 million in the region covering Europe, the Middle East and Africa.
The company has been pushing to tap
new markets abroad, including in sub-Saharan Africa, where some industry forecasters have projected content streaming to expand at a rapid clip in the coming years.
Netflix also said Tuesday it expects to add another six million users in the current quarter, less than half of what it added for the same period a year ago, which saw a huge rise due to the pandemic lockdowns.
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