Netflix has recorded an increase of almost 16 million subscribers to its video streaming service. The company is one of the few that is still pushing growth amid the global COVID-19 pandemic.
The platform has become one of the major sources of entertainment worldwide as millions of people are currently at home.
Netflix’s 15.8 million new subscribers, is over two times its initial projection of over 7.2 million. This is a growth of more than 22.8 percent year over year.
The total number of Netflix subscribers worldwide is now about 182.9 million. It also exceeded its quarterly revenue forecast of $5.76 billion by $1 million, making $5.77 billion in total.
“[Our] membership growth has temporarily accelerated due to home confinement,” Netflix said in its quarterly letter to its shareholders.
The letter also adds that “some cash spending on content will be delayed, improving our free cash flow, and some title releases will be delayed, typically by a quarter,” because of the shutdown of Hollywood productions.
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Netflix is projecting 7.5 million net additions worldwide for the second quarter of 2020.
“Hopefully, progress against the virus will allow governments to lift the home confinement soon. As that happens, we expect viewing and growth to decline,” its letter speculated.
Netflix cautious in an uncertain time
The company attributes part of its growth to the lockdown and says it is taking precaution for the aftermath.
It says “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”.
However, despite the increase in the number of subscribers, Netflix blames international inflation for the lack of a corresponding increase in income.
“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,” according to its letter.
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