- Netflix added a record 15.77 million global subscribers in the first quarter—many signing up after lockdowns began in countries around the world.
- Hit shows include Tiger King: Murder Mayhem and Madness and the reality dating show Love is Blind.
We’ve suspected the coronavirus pandemic was probably good for Netflix’s business, but now we know just how good. The answer: even better than anyone expected.
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Netflix added a record 15.77 million global subscribers in the first quarter—many of whom signed up in March after lockdowns began in several countries around the world, the company said in a letter to shareholders today (pdf). The streaming service, which forecast only 7 million new subscribers before the pandemic reached full force, now boasts 183 million total subscribers.
“Our membership growth has temporarily accelerated due to home confinement,” the company said.
Disney+, the Disney’s streaming service which launched in November, has only 50 million subscribers, though it’s on track to easily outpace its estimates of 60 to 90 million subscribers by 2024 as streaming usage surges globally.
Netflix’s previous record for subscriber additions occurred in the same quarter last year, when it added 9.6 million members. The company’s stock soared on today’s record-breaking news, jumping 9% in after-hours trading and adding to what was already a strong quarter. Before today, it was already one of only 30 S&P 500 companies to post gains so far in 2020.
Netflix had a number of hits this quarter, including the wacky documentary series Tiger King: Murder Mayhem and Madness and the reality dating show Love is Blind. Netflix claimed 64 million US households tuned into Tiger King, while 30 million watched Love is Blind. While the numbers seem large, Netflix counts anything watched for at least two minutes to be a view.
The company said that despite the record membership growth and increased overall viewing, “a sharply stronger US dollar” depressed its international revenue, which led to only meeting its revenue forecast. (Netflix made $5.77 billion in the quarter, just about what analysts were expecting.) “We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon,” it added.
Even if global confinements last through the summer, Netflix thinks it has enough brand recognition and content already in the pipeline to remain in a strong position relative to its competitors.
“Our content competitors and suppliers will be impacted about as much as we are, in terms of new titles. Since we have a large library with thousands of titles for viewing and very strong recommendations, our member satisfaction may be less impacted than our peers’ by a shortage of new content, but it will take time to tell,” the streaming service added in its letter.
Almost all filming on Netflix content has stopped except in a few countries, such as South Korea and Iceland. More than 200 of its projects are still in post-production, and can be worked on remotely. In an interview with CNN last month, Netflix content boss Ted Sarandos predicted the pandemic would only have minimal impact on its content supply chain, at least until much later this year.
After that, though? No one—Netflix, included—knows what the entertainment landscape will look like if there are no new shows or movies to offer customers. At that point, the companies with the most robust catalog of older titles will likely be the ones to stay afloat until production can resume.