Netflix has passed the 200 million subscriber mark after adding a net total of 8.5 million new users in the fourth quarter of 2020.
The popular streaming service now has just shy of 204 million paying viewers around the world, according to its latest investor letter. This marks a 30% increase from where it was a year ago.
With a net growth of 37 million subscribers for the full year, Netflix added 9 million more new subscribers than it did in 2019.
This has helped cement its position as the top streaming provider in the world, ahead of Amazon Prime at 150 million subscribers and China’s Tencent on 120 million. Newcomer, Disney+ has 86.8 million subscribers.
The company’s earnings came in at $6.64 billion for the final quarter, slightly above analysts’ predictions of $6.63 billion, with a profit of $542 million. For the entire year, Netflix reported close to $25 billion in revenue and around $2.8 billion in profit.
The results helped push Netflix shares over the $550 mark.
Part of the company’s success this year has been a slew of popular series that have struck a chord with viewers.
“In 2020 alone, we had Tiger King, Bridgerton and The Queen’s Gambit. Not only did 62m member households choose to watch The Queen’s Gambit in its first 28 days (making this show our biggest limited series in Netflix history), but it ignited sales of chess sets and inspired the next generation of chess prodigies,” Netflix said.
Netflix has now predicted that it will add an additional 6 million new subscribers in the first quarter of 2021.
Its revenues will be bolstered by an upcoming price increase, which will see its standard plan for UK users rising from £8.99 to £9.99.
To fuel its expansion, Netflix needed to borrow substantial amounts of money, estimated to be around $15 billion. With around $8 billion in cash on hand, the company has said it will use that to pay back its debt that matures this year. In addition, this year’s profits mean it aims to stop borrowing money and may buy back shares.
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The Covid-19 lockdown has been a blessing for streaming services. With millions stuck in their homes, people turned to their televisions, laptops, and phones for entertainment. Ofcom figures from summer last year showed that UK adults’ streaming consumption almost doubled compared to pre-lockdown figures, to over an hour per day.
However, while Netflix ended 2020 strong, its future might be less secure. Disruptions from the coronavirus have delayed the creation of new content. New seasons of Netflix hits like The Witcher, Riverdale and Stranger Things all faced delays.
While Netflix’s 2020 lineup of new content was largely shot and in post-production before the pandemic hit, the delays will only begin to bite this year.
Furthermore, the streaming market has become increasingly saturated, with the release of Disney+ in the UK coinciding with the start of lockdown. Its growth has been particularly rapid, driven by the success of Star Wars spinoff The Mandalorian. Disney+ is also still in the process of rolling out globally.
“The big growth in streaming entertainment has led legacy competitors like Disney, WarnerMedia and Discovery to compete with us in new ways, which we’ve been expecting for many years,” Netflix said.
“This is, in part, why we have been moving so quickly to grow and further strengthen our original content library across a wide range of genres and nations.”