Netflix surpasses 200m subscribers as revenues rise again

20 Jan 2021

Image: © sitthiphong/

The company saw revenues grow last quarter and will no longer raise external capital to fund its films and TV shows.

Netflix ended 2020 on a high, surpassing 200m users and coming close to balancing out its large investment in original content, according to its latest quarterly earnings report.

Revenues continued to grow for the company. It reported $6.6bn for the last three months of 2020 – with $2bn of that coming from the EMEA market – but it typically invests heavily in original films and TV series.

Its net income was $542m for the fourth quarter, down from $790m the quarter prior, but the company said it is close to being sustainably free cash flow positive.

“[We] believe we no longer have a need to raise external financing for our day-to-day operations,” Netflix said in its shareholder letter. It added that it will consider share buybacks this year to return some cash to shareholders, something it hasn’t done since 2011.

This is notable for the company, which has been drawing regularly on external financing to the tune of billions of dollars to fund its hefty original content strategy. But this investment has been paying off in attracting viewers.

During the first months of the pandemic, Netflix saw very strong growth in its userbase but there was a slight slowdown around the third quarter. That pace picked up again as the streaming giant has now passed the 200m subscriber mark, having added 8.5m subscribers in the last quarter – higher than analysts had expected – and 37m in 2020 in total.

After the previous quarter, analysts had expected Netflix to report some slowdown in user activity for the end of 2020, compared to the soaring highs at the start of the pandemic and also with price increases in some markets.

The company cited the latest season of The Crown and its original film The Midnight Sky as major drivers of viewers to its service late last year. It forecasts the addition of 6m more subscribers by the end of March.

The larger-than-expected bump in users saw Netflix’s share price rise 11pc in after-hours trading on Tuesday (19 January). Netflix is currently trading at around $501 with a market cap of $221bn.

The company acknowledged the ever-increasing competition it faces from Disney+, which has amassed 87m paid users, as well as Apple TV+, HBO Max and Peacock, while Paramount+ also is forthcoming.

But Netflix’s investment in original content marches on. It currently has 500 titles in post-production or being prepared for release. It recently announced it would be releasing one new original film every week this year.

Jonathan Keane is a freelance business and technology journalist based in Dublin