Netflix has announced that it has gained 15.77 million new subscribers to its platform in Q1 as more and more people stay at home globally courtesy of the Covid-19 pandemic. This is double what the number that they had forecasted before the current crisis which was 7 million.
At the same time, they reported a revenue of $ 5.77 Billion and earning per share of $1.57. In an investor letter, Netflix outlined three main impacts that the pandemic had on its finances, that is; membership growth temporarily accelerated due to home confinement. International revenue was predicted to be less than the previous forecast due to the dollar rising sharply. With the production shutdown, there will be a delay in cash spending on content that will improve their free cash flow and some title releases will be delayed by a quarter.
Currently, Netflix is treating the growth as a short-term spike with viewing and growth expected to decline when progress against the pandemic will allow governments to lift home confinement. As such it is forecasting a 7.5 million global net additions in Q2.
In regard to content, the global halt to movie and Tv production will have an effect on the service’s content plans. However, the company has stated that there will only be a modest impact in Q2 mostly in language dubbing.
A choose to watch metric which counts everyone who chose to watch a given show or movie and watched for at least two minutes. Has indicated that a total of 85 million people watched “Spenser Confidential” while 65 million people watched “Tiger King”.
Chief Content Officer, Ted Sarandos, had this to say, “Our productions, our post productions, our offices are now distributed into people’s living rooms and bedrooms and kitchens around the world. It’s just an incredible testimony to the innovation that literally within a few hours, but certainly within a few days of the shutdowns, we had production up and running remotely, post-production up and running remotely, animation up and running remotely, pitch meetings happening virtually, writers rooms assembling virtually.”