Netflix blows away new subscriber expectations with About 16 Million subscribers added

The COVID 19 pandemic has almost everyone stuck at home. Production and Video streaming Service Netflix is one of the biggest beneficiaries of this situation as many people have resorted to it for entertainment.

Netflix had initially forecast 7 million net new paid subscribers but Q1 came in at more than double expectations, with 15.77 million paid net additions. Netflix’s total paid subscriber count now stands at 182.86 million. The company also reported revenue of 5.77 billion dollars and earnings per share of 1.57 dollars.

In its investor letter, Netflix outlines three main impacts that the pandemic has had on its finances: First, the membership growth temporarily accelerated due to home confinement. Second, international revenue was less than previously forecast due to the dollar rising sharply. Third, due to the production shutdown, some title releases were delayed.

Netflix is treating this growth as a short-term spike and forecasts a mere 7.5 million global net additions in Q2. The global halt to movie and TV production might affect the service’s content plans.

CEO Reed Hastings emphasized the unpredictability of the long-term effects of the pandemic on Netflix’s growth.

“We don’t use the words ‘guess’ and ‘guesswork’ lightly,” he said. “We use them because it’s a bunch of us feeling the wind, and it’s hard to say. Bain, will internet entertainment be more and more important in the next five years? Nothing’s changed in that.”