- Netflix tops 150 million paid subscribers in Q2 report
- It now invests in excess of US$15 billion per year on original content
In its income report for the second quarter of 2019, Netflix has reached 150 million paying subscribers worldwide. All in all, the streaming giant posted $4.92 billion in income (around $6.42 billion CAD), in line with Wall Street’s projection of $4.93 billion (around $6.43 billion CAD).
However, Netflix recorded a loss of 130,000 subscribers for the first time in the U.S. Further, the company only added 2.83 million new subscribers around the world — nearly half of the expected five million.
Since reaching 100 million subscribers in April 2017, Netflix has added an additional 50 million members. In other words, Netflix has done in the past two years what initially took 14 years to achieve.
Netflix first introduced as the world’s first internet DVD rental shop in April 1998. While Netflix was popular from the outset, reaching 500,000 DVD-by-mail subscribers took nearly three years for the business.
It had accumulated more than 6 million subscribers by the moment Netflix launched its streaming service about a century later in 2007.
By contrast, the following streaming decade opened the door to amazing development. Its subscriber base in 2014 reached 50 million and in 2017 reached 100 million participants. The business now works in over 190 nations, in each industry catering for local language and content tastes.
“First-mover advantage is everything in tech,” Cyrus Mewawalla, head of thematic research at GlobalData, told BNN Bloomberg in an email. “By launching Netflix’s streaming service ten years ago, Netflix offered consumers the convenience and cost benefits of video streaming before anyone else.”
Netflix CEO Reed Hastings ascribed the underperformance to a weaker Q2 2019 content slate and price hikes in different nations in a letter to shareholders. Hastings also observed that the over-predicted 9.7 million fresh subscribers added in Q1 may have “more pull-forward impact than we realized.” According to Netflix, some of its most remarkable initial films and shows released in Q2 2019 include the Ali Wong-Randall Park romantic comedy Always Be My Maybe (viewed in its first month by 32 million homes), limited drama series When They See Us (viewed by 25 million households) and young adult romantic comedy The Perfect Date starring teen heartthrob Noah Centineo (watched by 48 million households in its first four weeks).
Looking forward, thanks to such original content as the third seasons of Stranger Things and Ozark, Hastings expects Netflix to have a strong third quarter, the seventh and final season of Orange is the New Black and original comedy specials from Whitney Cummings and Aziz Ansari alike. Netflix, however, will experience enhanced competition from Apple’s TV+ streaming service towards the end of Q3, which will launch this September globally. Disney, Warner Media and NBC Universal streaming services will also make their debut in the months after the Apple TV+ debut, resulting in content like Disney movies, The Office and Friends leaving Netflix.
Netflix recognized the loss of this material in its letter to shareholders, but stated that this will open “budget for more original content.” According to Netflix, its most famous licensed titles such as Friends and The Office only account for a small one-digit proportion of total streaming hours. “From what we’ve seen in the past when we drop powerful catalog content (such as Starz and Epix with Sony, Disney, and Paramount movies, or Fox’s 2nd run series), our employees are shifting to enjoying our other excellent content,” Netflix said.
Netflix now invests in excess of US$15 billion per year on original content — an enormous amount,” according to GlobalData’s Cyrus Mewawalla.
Winning over new customers could prove more challenging as rivals such as The Walt Disney Co., Apple Inc., Amazon.com Inc., Comcast Corp. and WarnerMedia build out their own streaming offerings.