Netflix adds almost 16 million new customers amid lockdowns
Streaming service sees surge in demand
Netflix Inc. on Tuesday reported more paid subscribers than expected in the first quarter, as global lockdowns to curb the spread of the coronavirus forced people to stay at home and watch shows online, including the wildly popular Tiger King.
The streaming giant added 15.77 million paid subscribers globally during the quarter compared with analysts' estimates of nearly eight million, according to research firm FactSet.
The company warned, however, that it expected fewer new customers from July to December compared with a year earlier. Many people who would have joined then are likely to have already signed up, executives said.
"We expect viewing to decline and membership growth to decelerate as home confinement ends," Netflix said in a letter to shareholders.
Shares of Netflix rose 1.2 per cent to $439 US in after-hours trading on the Nasdaq.
More people at home means more viewers
The company is among the few businesses to benefit from government orders imposed in March to keep people in isolation amid the coronavirus threat. While the S&P 500 Index has fallen 19 per cent from its Feb. 19 record high, Netflix has gained 11 per cent during the same period.
Netflix also issued a bullish forecast that it would add 7.5 million new customers for the current quarter, which ends in June, though the company said it was "mostly guesswork" given uncertainty over when stay-at-home orders might be lifted. Analysts surveyed by FactSet had expected 3.8 million.
In the quarter, Netflix true-crime documentary Tiger King about a colourful zookeeper became a cultural sensation. It also released reality show Love is Blind and a new season of Spanish-language thriller Money Heist.
As streaming video has grown in the United States, the market has become more competitive with the debut of Walt Disney Co's Disney+ and upcoming rivals. That has pushed Netflix to look for growth overseas.
The company's biggest expansion from January through March came from Europe, where it added 4.4 million new customers.
The most popular Netflix plan in the United States costs $13 US, nearly double the $7-per-month cost for Disney+.