Netflix's new subscribers are over 15 million, more than double the expected growth, due to the new coronavirus
Netflix, a subscription-based video distribution service, has announced its financial results for the first quarter of 2020. According to it, net income was 2.1 times more than the same period last year, about 709 million dollars (about 87 billion yen), and more than 15 million new subscribers were received worldwide.
Netflix-Netflix First Quarter 2020 Earnings Interview
Netflix's revenue for the first quarter of 2020 was $ 5,768 million, a 27.6% year-on-year increase. Of that, operating profit was 985 million dollars (about 103 billion yen), and net profit was 709 million dollars. The operating profit margin was 16.6%, which was lower than the expected 18.0%, but 'This was due to the additional cost of 218 million dollars (about 23.5 billion yen) due to the temporary suspension of production and the difficulty of financing.' Explains Netflix.
Netflix said that the number of subscribers has rapidly increased since mid-March 2020, and it has gained 15.8 million new subscribers. This is more than double the pre-estimated figure of 7.2 million, up more than 22% year-over-year. At the time of writing, Netflix has 182 million subscribers worldwide. Regarding the rapid growth in the first quarter of 2020, Netflix was affected by the `` temporary increase in the number of self-excluded people due to the pandemic of the new coronavirus infection (COVID-19) and the temporary increase in the number of members '' It says that.
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However, while the number of subscribers and net income increased, 'content production stopped,' 'a large dollar appreciation caused international revenue to be lower than expected', etc. Positive content for Netflix It was also pointed out that it was not all.
Although the number of Netflix subscribers increased at the timing when lockdown was announced in each country from the middle of March 2020, it seems that the sales per user were on a downward trend, and this effect is after the second quarter of 2020 Netflix expected it to appear.
Netflix said, 'If countermeasures against the new coronavirus are in place and the government's lockdown is released, viewership will decline and membership growth will slow down.' The number of additional paid plan contracts is expected to be about 7.5 million. People who did not enter Netflix while the lockdown was announced will not join even if the lockdown is released, and the delivery schedule of the drama and movie will be misaligned due to delay in production, so 2020 Netflix estimates that growth will generally slow in the third and fourth quarters.
by Alper Çuğun
Netflix speculates that lower revenue spending is partly due to delays in content projects planned for 2020 as a reason for the increase in revenue. How long will it take for content production that has been suspended in response to instructions and requests from the government and local governments to be safely resumed, whether overseas location will be possible even if it resumes, talent / stage / There is no prospect of how negotiations for various resources such as post production will be developed.
However, production is not completely stopped, it is possible to shoot in South Korea and Iceland, and more than 200 projects are being carried out by remote system. Especially, the animation production team seems to be restarting their work at home. 'We are certainly affected by the suspension of content production, but we look forward to continuing to deliver some great new releases through 2020 and 2021,' Netflix said.
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