Streaming giant Netflix has blown its forecasts away with a record-setting quarter that added 16 million subscribers to the popular video streaming platform.
Yesterday, Netflix published its quarterly earnings report which saw its forecasts for the quarter absolutely shattered by a pandemic leading tens, if not millions of people stuck at home and signing up to its services. The figures were more than double what entertainment analysts and Wall Street alike had predicted for the company, and represented by far the company’s single biggest quarter of its history.
In January, Netflix said that it anticipated it would add around seven million subscribers in the three-month period following. The reality, however, is that Netflix managed to add 15.7 million new subscribers to its books.
In a release, the company said that “we’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which can operate remotely with minimal disruption in the short to medium term.”
“Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth,” it said in a letter to its investors.
Netflix’s previous record for a quarter’s worth of additional subscriptions stood at 9.6 million, recorded around a year ago.
In the early stages of the pandemic, Netflix’s stock price stood around USD $299, the lowest since December of 2019. In just a month, the share price has jumped a staggering 46%, hitting an all-time high price of $438.
Netflix says that the boost in subscriber numbers was lead by an additional 2.3 million in the U.S. and Canada; more than double the forecasted trend from previous quarters. Globally, Netflix now has 183 million subscribers, of them, 60 million in the U.S.
The letter also stated that “like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth,” however, “we expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.”
A number of factors would put Netflix “well below or well above” its predictions, stating that “when people can go back to their social lives in various countries, and how much people take a break from television after lockdown” could ultimately hurt its bottom line.
The company also acknowledged that production delays are very much on the cards, but argues that its existing library puts it in a more attractive position than some of its rivals.
Some analysts, however, are concerned about Netflix’s long-term ability to hold onto subscription numbers as lockdown measures continue to swallow jobs globally. Jim Nail, an industry analyst at Forrester told The Washington Post that “I think what you’ll have in the coming months is an interesting question. Yes, people at home might be subscribing to netflix to entertain themselves or their kids, but as this drags on and there are jobs and paychecks lost, I think people will sit down and make tough decisions about where to cut, and one of them might be to cancel streaming services.”
That same report says there’s a possibility that the pandemic in Asia and Europe, key markets for Netflix’s expansion plans, could hinder further growth, as well as the lack of production currently taking place for future content.
Co-founder of Netflix Reed Hastings told analysts that “our small contribution in these difficult times is to make home confinement a little more bearable. We too are really unsure of what the future brings.”
Netflix also promoted its recent contributions of $150 million to support the entertainment industry through the crisis, which is made up of donations to production crews that have been left with no work, as well as non-profits supporting the sector.