Netflix sees ‘strong finish’ to 2019, despite competition from Disney

22 Jan 2020259 Views

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As competition heats up in the streaming wars, Netflix remains confident that its head start will give it an edge over Apple and Disney.

In its earnings figures for Q4 2019, Netflix said that it had a “strong finish” to the year, despite increased competition in the so-called ‘streaming wars’ from newcomers Apple and Disney.

Netflix, which remains the dominant streaming company, reported that its revenue has grown 31pc year on year, bringing full-year 2019 revenue to more than $20bn. Over the course of 2019, operating income rose 62pc to $2.6bn and, for the first time, the company surpassed 100m paid memberships outside of the US.

There are now around 167.1m people subscribed to Netflix, after 8.76m people subscribed in the last quarter. This surpassed the company’s forecast for this quarter, which was set at 7.6m in October 2019.

Netflix’s forecast for 2020

It’s likely that Netflix’s subscription numbers in Q4 2019 were impacted by Christmas and the holiday season, so the company has forecast a more conservative figure for Q1 of 2020. During this quarter, Netflix expects to see 7m new subscribers joining its platform.

This estimate is below the 9.6m that Netflix forecasted for Q1 of 2019, which was an all-time high in quarterly paid subscribers. The company expects a “more balanced” number of new subscribers in Q1 and Q2 of this year, “with seasonality more similar to 2018 than 2019”.

‘We have a big head start in streaming’
– NETFLIX

The company outlined some of the content it has lined up for Q1 this year, including returning seasons of Sex Education, Altered Carbon, Narcos: Mexico, a Spanish series entitled Elite, and Korean historical zombie thriller Kingdom.

The company also has some new movies lined up, including Mark Wahlberg action film Spenser Confidential, and To All the Boys: P.S. I Still Love You.

Successful content in Q4

Netflix said that these titles will “build off of a highly successful Q4 content slate, which included new seasons of The Crown, Big Mouth and You, and new series and films like Rhythm & Flow, American Son, Turkish series The Gift and French film Banlieusards”.

According to Netflix, psychological thriller series You is estimated to attract 54m member households to watch season two within its first four weeks on the platform. Netflix also said that more than 21m households have watched season three of The Crown, and in total more than 73m households worldwide have watched The Crown since the series launched.

Additionally, 83m member households watched the new Michael Bay movie 6 Underground, which stars Ryan Reynolds, within its first four weeks on the site.

Netflix also gave a nod to its new original series The Witcher, which is tracking to become the one of platform’s biggest TV shows in its first season.

The streaming business said: “Through its first four weeks of release, 76m member households chose to watch this action-packed fantasy, starring Henry Cavill. As a testament to how our hit content can penetrate the global zeitgeist and influence popular culture, the show’s launch drove up sales of The Witcher books and video games around the world.”

No concerns about Disney+

Seemingly unconcerned about the imminent launch of Disney+ in Ireland and other parts of Europe, Netflix listed some of the 24 Academy Award nominations its films received this year, with nominations for Netflix productions such as The Irishman, Marriage Story and The Two Popes.

Netflix said: “Many media companies and tech giants are launching streaming services, reinforcing the major trend of the transition from linear to streaming entertainment. This is happening all over the world and is still in its early stages, leaving ample room for many services to grow as linear TV wanes.

“We have a big head start in streaming and will work to build on that by focusing on the same thing we have focused on for the past 22 years – pleasing members. We believe that if we do that well, Netflix will continue to prosper.”

The company pointed to its Q4 figures, which showed growth despite the launch of Apple TV+ and Disney+. In its earnings report Netflix said: “Our viewing membership grew both globally and in the US on a year-over-year basis, consistent with recent quarters.”

Kelly Earley is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com