Anna Daniels
Business is good for Netflix, which has become one of the rare companies to benefit during the coronavirus (COVID-19) pandemic. The streaming giant has more than maintained its crown as the top streamer, even as new competitors emerge left and right to offer new content to the millions staying at home. But even as Netflix enjoys unprecedented success and a new subscriber count that blows past expectations, the streamer is just as worried about the future as everyone else.
In the January-March window, Netflix added a whopping 15.8 million subscribers, more than double the 7.2 million expected. The streamer attributed the huge uptick in new subscribers in the first quarter to people staying at home due to the coronavirus pandemic and a series of hit shows like Tiger King and Love is Blind, The Verge reports. The company also saw quarterly revenue of $5.77 billion versus the $5.76 billion estimated. With 182 million subscribers worldwide and a total net worth that has dethroned Disney, Netflix must be on top of the world now, right? Perhaps not, according to Netflix’s cautious opening letter to shareholders.
While Wall Street analysts have ranked Netflix as the favorite of “stay at home” stocks, Netflix warned of a potential downturn in the future.
“In our 20+ year history, we have never seen a future more uncertain or unsettling,” the company said in a letter to shareholders. The letter notes that growth will likely slow “after the lockdown is lifted country-by-country,” and that executives expect “viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.” The letter continues:
“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,” the letter reads. “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.” Netflix is taking extra precautions right now in an uncertain time, including “temporarily reduced the number of product innovations we try.”
The question becomes about the flow of original content, of which Netflix holds advantage over their competitors. Because Netflix releases full seasons in their entirety, they don’t have to worry about production delays for ongoing series like networks do. The TV shows it has in the pipeline for May, June, and July are likely already complete, The Verge reports. But dozens of Netflix productions have been stalled due to the pandemic, which could affect the flow of content down the line.
“While our productions are largely paused around the world, we benefit from a large pipeline of content that was either complete and ready for launch or in post-production when filming stopped,” the letter reads. “So, while we’re certainly impacted by the global production pause, we expect to continue to be able to provide a terrific variety of new titles throughout 2020 and 2021.”
Tiger King Success May Soon Be Outmatched
One of the titles that Netflix attributes to its major first-quarter success is Tiger King, the buzzy docuseries about the shady world of big cat owners. According to Netflix, at least 64 million subscribers have watched Tiger King, making the docuseries one of streaming company’s most-watched TV series to date (the top title still belongs to The Witcher). But in the first 25 days since its debut, Tiger King held the top spot on Netflix’s Top 10 list, until Despicable Me ended that streak this past Friday, The Wrap reports.
However, Tiger King could get knocked by yet another Netflix Original: the Spanish-language thriller Money Heist. The fourth season of Money Heist (aka La Casa de Papel) is projected to attract 65 million subscriber views in its first four weeks, unseating Tiger King as the most successful Netflix Original series of 2020, according to The Hollywood Reporter.
But of course, this is all by Netflix standards of a “view,” which the streamer recently changed its new metric to count at least two minutes of a series or movie.
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