Apple and its Apple TV+ streaming service could only dream of numbers this big.
Call it the ‘Tiger King effect’ or whatever you like, but Netflix benefited from the stay-at-home, shelter-in-place directive by adding 15.77 million new subscribers worldwide in the first quarter, according to earnings results released Monday.
The streaming media giant reported it has 182.86 million paid members globally, a 22.8% increase, year-on-year versus 174.09 million.
The 15.77 million increase in paying customers crushed estimates of some 8.5 million. That compares to 8.76 million in net additions from last quarter, and 9.6 million net adds from the same period a year ago.
How big was Netflix’s growth last quarter? Two weeks ago, estimates put total current Apple TV+ subscriber numbers between 30 million and 40 million. Assuming those numbers are even accurate, the new Netflix numbers would show that the dominant streaming service is more than capable of adding new users even as it faces fresh competition from Apple, Disney + and others.
The numbers were so off-the-charts that Netflix management warned the markets its membership increases can’t continue with such remarkable numbers forever.
Don’t expect miracle numbers in three months
In its letter to shareholders, Netflix said it expects viewership and subscriptions to spike but warned of an expected decline in viewership and slowdown in growth down the road. It also said that the strength of the U.S. dollar will hurt its international revenue.
“Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth,” company executives wrote. “We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.”
Netflix said on the downside, the company had “significant disruption when it comes to customer support and content production.
“… We’ve taken on another 2,000 agents (all working remotely), so our customer service levels are almost fully restored despite the increased demand.”
New subscribers to be less than half in Q2
Netflix said it expects 7.5 million more global paid subscribers in the second quarter, but warned the number was “mostly guesswork” since it can’t know when stay-at-home orders around the world will be lifted.
It said it expects lower net subscriber additions in the third quarter as more economies open and because its third quarter last year included new seasons of shows like Stranger Things and “Money Heist.”
Thank you, Tiger King
Netflix released viewership numbers for some of its popular programs in the quarter. Its docu-series Tiger King was viewed by 64 million member households, the reality dating show Love is Blind was viewed by 30 million households, and the original film Spenser Confidential was viewed by 85 million households.
In terms of actual financial numbers for the quarter, the company reported $1.57 earnings per share on revenue of $5.77 billion. The street consensus expected $1.64 in earnings per share on $5.74 billion in revenue.
