On Tuesday, Netflix Inc. revealed that it added over double the new subscribers than it expected amid the ongoing coronavirus pandemic.
The media-services provider reported more than 15 million paid subscriptions globally in the first quarter. Its biggest first quarter for paid subscriptions previously was 9.6 million in the year-ago period, according to FactSet. Three months ago, Netflix had 7 million new paid subscribers.
In the year-ago period, Netflix reported first-quarter earnings of more than $700 million. Its revenue grew from $4.52 billion to $5.77 billion in the year-ago period.
The online streaming service’s stock has shown more resilience during the ongoing coronavirus pandemic. It closed at a record high of $437.49 on Monday trading session.
Netflix executives said to shareholders, “During the first two months of the Q1, our membership growth was similar to the prior two years, including in [the U.S. and Canada]. Then, with lockdown orders in many countries starting in March, many more households joined Netflix to enjoy entertainment.”
Co-founder Reed Hastings described the quarter as a “pull-forward” for the rest of the financial year.
Greg Peters, Netflix’s Chief Product Officer, quickly ruled out any price increase in the near future.
Chief Content Officer of Netflix, Ted Sarandos said, “An unbelievably well-timed distraction” tapping into the cultural zeitgeist, mentioning “Tiger King” during the video interview.
Netflix’s executives said most of its animation-production team members were working from home and post-production was performed remotely on over 200 projects.
Disruption of the movie theatre industry due to the ongoing coronavirus crisis could increase Netflix’s subscriptions; however, Sarandos was noncommittal.
Analyst and Forecaster at eMarketer Eric Haggstrom said, “Netflix is completely focused on entertaining people in their homes. Netflix is much better equipped for this new reality than competitors reliant on theatrical releases, theme parks or live sports.”
The company’s executives said, “Hopefully, progress against the virus will allow governments to lift the home confinement soon.”
“As that happens, we expect viewing and growth to decline,” they added. “Our internal forecast and guidance is for 7.5 million global paid net additions in Q2.” The story originally appeared on marketwatch.com.
