Netflix Smashes First Quarter Growth With 10M Subscribers, Slump On Horizon
“We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.”
Netflix has recorded a booming Q2 with 10.2M new subscribers, beating its projected estimates of 7.5M. With much of the credit going to Shelter in Place orders, the streaming company is anticipating a ramp down in the coming months.
🎞 Added 26M new subscribers in the first two quarters of 2020 vs 2019’s total of 28M.
🎞 25% YOY revenue growth, but fell short of its Q1 goal.
🎞 For 2021, expects the paused productions will lead to a more second half weighted content slate for bigger titles.
🎞 Anticipates the total number of originals for 2021 to be higher than 2020.
🎞 Set to release 59 new TV seasons, movies, and documentaries, compared with competitors that are experiencing programming delays.
In its 2020 Shareholder Letter, the company noticed a significant disruption around customer support and content production. On customer support, they addressed work-from-home challenges by bringing on 2,000 agents (all working remotely), to meet the increased demand. On the content end, with many production halted globally, they created a $100M fund to help with hardship in the industry, starting with the hardest hit workers on their productions.
Without a repository of classic titles to compete against Disney or HBO, Netflix’s strategy has been to create as many originals as possible and licensing other titles. Given its expected strong growth through the initial stages of the pandemic, the uncertainty around how long it’ll last remains to be in question.
SOURCE: Netflix 2020 Q1 Shareholder Letter