Netflix adds nearly 16 million subscribers in the event of a virus shutdown

The streamer now has nearly 183 million subscribers worldwide.

People watching more entertainment while sheltering at home powered Netflix in the first three months of 2020, the company announced on Tuesday.

The streaming giant added 15.8 million subscribers in the first quarter of the year, a period of record growth that propelled its global base to nearly 183 million.

Netflix had planned to add just 7 million submarines over the period, but the company predicted that growth before the effects of the pandemic would be felt worldwide.

Despite the heavy period, CEO Reed Hastings touched a grim note in his letter to shareholders. “In our 20 years of history, we have never seen a more uncertain or troubling future,” he wrote. “The coronavirus has reached every corner of the world and, without a widespread treatment or vaccine, no one knows how or when this terrible crisis will end. What is clear is the escalation human costs in terms of lives lost and jobs lost., with tens of millions of people out of work. “

He went on to explain that Netflix is ​​experiencing “temporarily higher viewing and increased membership growth”, but “we expected viewing to decline and membership growth to slow down by the end of the year.” internment at home, which we hope will happen soon. ” The company plans to add 7.5 million submarines in the second quarter, which will span the period from April to June when most of the people have stayed at home, but has noted that the figure is “mainly a guess” given the uncertainty over how long the shutdown will last.

The strength of the US dollar during the global pandemic detracted from the company’s revenue growth over the period despite stronger than expected subscriber growth. Internationally, where Netflix added nearly 13.5 million submarines driven by strong growth in Europe, the Middle East and Africa, was lower than expected due to the sharp rise in the dollar.

During shutdown, the break Tiger King: murder, chaos and madness has been popular with viewers. Netflix predicts that 64 million members will “choose to watch” the show during its first four weeks of availability. The Spanish drama Money Heist was also a draw, with 65 million member accounts expected to watch the series. (Netflix has an account that selects a title and watches it for two minutes as a spectator.)

Netflix chief content officer Ted Sarandos noted on an alleged investor video that Tiger king “turned out to be an incredibly timely distraction.” He added that Netflix plans to continue pushing into new genres, including adding to its unscripted list with more programming in the home improvement and real estate categories.

Netflix’s solid quarter comes amid a wave of new competitors. Apple and Disney both entered the streaming world in late 2019, and NBCUniversal and WarnerMedia are launching products this year. During the investor’s video, Hastings reiterated that increased competition would lift the streaming category. But he acknowledged that Netflix would increase its programming for children and families to compete with newcomer Disney +.

“I was so impressed with the execution of Disney +,” said the executive. “I have never seen such a good performance by the incumbent operator learn the new way and master it.”

Netflix also provided new details on the impact of the shutdown on its operations, saying that the product team has not been affected but that product innovation has slowed as the company focuses on publishing features who “we know they will add significant value to our members, such as improving parental control.”

One area where Netflix has been most affected is the production of its upcoming projects. Like all entertainment companies, Netflix had to stop filming most of its shows and movies. (A few projects remain in production in Korea and Iceland.) The company said that the production of its animation projects continues thanks to homework setups and that more than 200 projects are in post-production.

Netflix has created a $ 150 million fund to support workers whose livelihoods have been affected by the closure and has said it will pay these teams for seven weeks.

But the company said its content list would not be affected in the short term. In the second quarter, Netflix plans to release all of its scheduled shows and movies, although the linguistic dubbing of some projects will be affected. And Sarandos noted that most of the service’s 2020 shows – including the fourth season of The crown and the animated film Over the moon – have been slaughtered and are in post-production.

Netflix will also complete its lineup with acquisitions of titles that were originally intended for theatrical release, including Paramount Lovebirds and Legendary’s Enola Holmes. ((Lovebirds was produced by MRC, which shares a parent company with The Hollywood Reporter.)

Netflix also said its customer support teams were disrupted by the shift to homework, but have largely recovered. The company added 2,000 customer support agents to meet the increased demand.

Netflix, which has exhausted its cash to maintain its level of strong growth in recent years, tends to become positive for its cash flows. The cessation of production means that he is currently investing less money at the start. As a result, he now expects to have a negative free cash flow of $ 1 billion for the year, compared to his $ 2.5 billion of negative free cash flow previously forecast.

The Netflix action closed the day at $ 433.83. The company’s shares, which jumped during Nasdaq trading hours, have risen nearly 32% since the start of the year.