Netflix absolutely obliterated expectations for new subscriber growth in the first quarter of 2020. The streaming service added 15.77 million new paid subscribers worldwide, with $5.77 billion in revenue coming in during that period as well. This is in no small part thanks to the ongoing quarantine for many people around the world.
According to the company's quarterly report, Netflix says it now has 182.9 million paid subscribers worldwide. That makes it far and away the biggest streaming service in the game and uniquely positioned to weather the current storm going on in the entertainment business. CEO Reed Hastings had this to say in a letter to investors.
"At Netflix, we're acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we 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. In our case, this is offset by a sharply stronger US dollar, depressing our international revenue, resulting in revenue-as-forecast. Hopefully, progress against the virus will allow governments to lift the home confinement soon. As that happens, we expect viewing and growth to decline."
The company is certainly trying to temper expectations slightly for the future. At some point, things will begin to return to normal. Undoubtedly, the staggering subscriber growth can be attributed to people needing something to do while cooped up at home. Once parts of the economy begin to open up around the world, that will surely slow down.
Another question that was addressed had to do with content. Netflix depends on a steady stream of original content to keep subscribers happy. While they still license content, exclusive original programming is what sets them apart from the competition. And that competition is increasing, with NBC's Peacock launching wide soon and HBO Max debuting next month. Disney+ has already added more than 50 million subscribers since launching last November. With nearly all filming on pause the world over, that will undoubtedly impact Netflix's content output. Per Reed Hastings, at least in the short term, they will be fine.
"While our productions are largely paused around the world, we benefit from a large pipeline of content that was either complete and ready for launch or in post-production when filming stopped... So, while we're certainly impacted by the global production pause, we expect to continue to be able to provide a terrific variety of new titles throughout 2020 and 2021."
Netflix featured several majorly popular original titles in the first quarter of 2020. The docuseries Tiger King proved to be a sensation, dominating social media conversation for weeks. Hit movies such as Mark Wahlberg's Spenser Confidential and To All the Boys: P.S. I Still Love You also debuted during this period. This news was previously reported by The Hollywood Reporter.