Anna Daniels
Prior to the emergence of COVID-19 in late December 2019, Netflix had a staggering 61 million U.S. subscribers and about 106 million international subscribers. According to Martin, it’s “unlikely that COVID-19 adds new U.S. subs,” even with so many people staying indoors. The disease will likely have the same effect overseas as well, as Martin suspects the spread of coronavirus may “cap growth” of Netflix’s worldwide subscribers.
Why is this? Well, the biggest portions of the streamer’s subscriber base outside of North America are Europe, the Middle East, and Africa. One European country, Italy, has issued a territory-wide quarantine, leaving millions of workers without a way to earn a living since they can’t travel to their jobs. Without that guaranteed money, some people may tighten their belts and cut ties with Netflix to save some cash.
“Italy just quarantined its entire country, implying millions of travel employees are not going to work or get paid, and travel globally has declined precipitously,” Martin explained. “Since [Netflix] is a luxury, we assume international churn will rise and offshore revenue growth will slow until COVID-19 retreats.”
Written by: Looper
