The quarter lasted for the start of home stay orders in the United States, Canada, and around the world, a response to the coronavirus pandemic that apparently led millions of people to connect to Netflix for entertainment and comfort. when most of them had nowhere else but their home.
Netflix more than doubled the quarterly growth forecast for January, long before the COVID-19 epidemic began to shut down many large economies. This is the biggest gain in three months in 13 years of Netflix’s streaming service history.
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The figures – released Tuesday as part of Netflix’s first quarter earnings report – support a growing belief that video streaming is likely to thrive even as the U.S. economy sinks into its first recession in more than a decade.
Over the past year, Netflix’s growth in the United States and Canada has slowed considerably. But the pandemic seems to have reversed this trend for the moment. Netflix added 2.3 million subscribers in the United States and Canada in the first quarter, compared to 1.9 million in the same period last year.
However, the way Netflix discloses its numbers doesn’t tell you how many new subscribers are coming from Canada. The company briefly provided figures at the end of 2019 that highlighted its customer base across the country, but now prefers to consolidate its operations in the regions.
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The company previously said that Canada represented approximately 10% of its subscriber base in North America, suggesting that it increased subscribers here by 230,000 in Canada during the quarter, compared to 125,000 paid registrations. during the fourth quarter which ended in December. 31, 2019.
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“We are fully aware that we are fortunate to have an even more meaningful service for housebound people, and that we can operate remotely with minimal disruption,” Netflix said in a statement.
Investor optimism about the Netflix outlook has propelled the company’s shares to new heights recently, a stark contrast to the wider market downturn.
Netflix stocks first surged in after-hours trading after the release of the first quarter report and then fell. The stronger dollar is likely to depreciate company revenues outside the United States, including some of its fastest growing markets.
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This is one of the reasons why Netflix revenues increased only 17% from last year to reach US $ 5.8 billion, even though they ended in March with nearly 183 million subscribers worldwide, an increase of 23% over the same period last year. Netflix earned US $ 709 million in the first quarter, almost three times last year.
Netflix’s shares rose slightly less than 1% in Tuesday’s extended trading to US $ 437.37, leaving them last week’s record high of US $ 449.52.
Even though it faces intense competition, Netflix seems better positioned to capitalize on the growing demand for TV shows and movies, largely due to its lead in video streaming.
Since starting its foray into original programming seven years ago, Netflix has built a comprehensive catalog that can fuel the appetite of viewers even if the response to the pandemic has stopped the production of many new shows.
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The shutdown could also hurt Netflix, although analysts at Canaccord Genuity believe its video library will serve as a “content divide” that can keep most competitors at bay.
Content director Ted Sarandos reassured investors in a video interview that he does not anticipate any problems with future versions of Netflix, since the TV series seasons are produced in full, well before their release, unlike many traditional network television programs.
“Our 2020 series and film list is largely toured and is in remote post-production in places all over the world, and we’re actually pretty deep in our 2021 list,” he said.
Sarandos highlighted the production of “The Crown”, a drama series about the royal family, which has already been filmed and which is “in the process of being finalized” for release later this year.
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But there will be a few smaller obstacles along the way as Netflix production gets used to the impacts of COVID-19.
The company said home isolation in countries around the world has made it impossible to produce dubbed versions of some of its original programs “in Italian and other languages” because vocal talent cannot access the required equipment. These affected titles will be released in April and May, but a representative was unsure of the movies or TV series that would be affected and could not say if the French translations were being produced.
Netflix has said it hopes voice actors will be installed in their homes to record future duplicates.
Among its biggest challengers on the market is Walt Disney Co., whose recently launched streaming service is also packed with perennial classics, especially for kids who have even more free time than usual.
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This is one of the main reasons why the Disney service has gathered 50 million subscribers and why Netflix is enjoying a new resurgence in popularity. Netflix has predicted it will add 7.5 million subscribers from April to June. That’s almost three times more than its average spring gain of 2.7 million subscribers in the past seven years.
“As we have a large library with thousands of titles to watch and very strong recommendations, the satisfaction of our members may be less impacted than our peers,” boasts Netflix in its report.
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© 2020 The Canadian Press