Netflix added 15.77 million paid subscribers globally during its Q1 2020 fiscal quarter, more than double what the company forecast in its prior earnings report. Netflix is among the first entertainment companies to report earnings since the coronavirus pandemic began disrupting film and television productions, and the company’s considerable subscriber gains confirm that many consumers are turning to streaming services to keep themselves entertained due to stay-at-home orders and social distancing guidelines.
Though Netflix reported strong subscriber gains, its $5.76 billion Q1 revenue was in-line with Wall Street expectations, which Netflix attributed to the rising value of the United States dollar, dragging its international revenue growth down.
Netflix released several popular projects in Q1, including ““Tiger King: Murder, Mayhem and Madness.” Netflix said the true crime docuseries had 64 million viewers, while unscripted dating show “Love is Blind” had 30 million viewers. “Spenser Confidential” had 85 million viewers and the company is projecting that “Ozark” Season 3, which premiered March 27, will have a viewership of 29 million within its first four weeks. Netflix changed how it reports its viewership in its last earnings report — essentially to make the viewership numbers higher — and the company does not regularly release viewership data.
Regardless, Netflix told investors that its large viewership and subscriber gains were temporary and expects those numbers to fall once governments begin to lift home confinement orders. The company is forecasting 7.5 million global paid subscriber additions in Q2 but admitted that those numbers were mostly guesswork due to the global uncertainty caused by ongoing pandemic.
While Netflix is enjoying short-term gains, the entertainment industry’s widespread production shutdowns pose significant questions for Netflix in the months ahead. The company said production shutdowns would only have a minor impact on its Q2 release slate, primarily regarding language dubbing, and said upcoming titles such as “The Lovebirds,” “Enola Holmes,” and Ryan Murphy’s “Hollywood” are still expected to release on schedule. It is still uncertain when Netflix will be able to resume production on other highly-anticipated projects, such as new seasons of “Stranger Things” and “The Witcher.”
Netflix’s stock held fairly steady after reporting its Q1 earnings — it was up 1.1 percent at press time in after-hours trading. Netflix has performed better on Wall Street than most entertainment companies since the coronavirus pandemic began. The company’s stock has been steadily rising since mid-March, while many of its competitors — such as Disney, whose Disney+ streaming service had reportedly cut into Netflix’s success several months ago — has sharply fallen since the coronavirus pandemic began and its parks and resorts were shut down.