Netflix is one of the few companies benefitting from the global COVID-19 pandemic – with billions at home with nothing to do but stream, the OTT service has seen a huge boom in growth. The question now is, how long can they keep this up?
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According to The Verge, much of Netflix’s recent boom didn’t begin until Mid-March, when more people began being forced to stay at home to help flatten the spread of the novel coronavirus that has now become a worldwide catastrophe.
With a series of popular, original shows and movies – Netflix’s first-quarter sky-rocketed. Adding 15.8-million subscribers, more than double the expected 7.2-million. A growth of more than 22% year over year. The streaming service now sits at 182-million subscribers worldwide.
The company also saw quarterly revenue of $5.77 billion versus the $5.76 billion estimated.
Netflix, however, isn’t celebrating yet. In a letter to shareholders, the company states it fully expects the number of subscribers and overall viewership to decrease as international lockdowns start to lax.
The letter reads that “some of the lockdown growth will turn out to be pull-forward from the multi-year organic growth trend, resulting in slower growth after the lockdown is lifted country-by-country.”
“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,” it reads.
Netflix continues to be hopeful that it will keep producing content as the world grows ever-inward.
“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.”
Edited by Luis Monzon
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