In the last three months of last year, streaming service Netflix has gained more than 8.5 million new subscribers. With that, the entertainment company far exceeds its own expectations and more than 200 million people worldwide now watch Netflix.
The streaming service previously expected 6 million new subscribers in the fourth quarter.
Netflix’s growth was less strong than in the spring, when the number of subscribers at the time of the first corona wave increased by more than 27 percent compared to a year earlier. Now that is just under 22 percent to a total of 203 million paying viewers. In the first three months of 2021, that growth rate will have slowed to 14 percent, the company itself expects.
Due to the arrival of new Netflix viewers, turnover rose by just under 22 percent in the past quarter to 6.6 billion dollars (5.4 billion euros). The company then posted a net profit of USD 542 million (EUR 446 million), which is slightly less than a year earlier.
Competition from other streaming platforms is increasing. For example, Disney +, which was launched in the fall of 2019, already has almost 87 million subscribers. In addition, Amazon had about 150 million Prime members at the end of January 2020. Experts also fear the lower prices that competitors ask for a subscription, while Netflix recently increased prices.
Netflix promises new films every week
To remain the biggest, Netflix recently promised to put a new self-made movie online every week in 2021. In the past, much more money flowed out of the company than came in to finance all those productions, which meant that a lot had to be borrowed every time.
That so-called ‘cash burn’, or negative free cash flow, will be over by the end of 2021, according to Netflix. Because the company expects to run even this year, it is no longer necessary to bring in fresh money to pay for its daily business, according to Netflix.
That announcement also made Netflix popular among investors. The company wants to use the remaining cash to buy back its own shares, which will boost earnings per share. In the aftermarket trade, Netflix’s share rose to 12 percent.
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