SAN RAMON, Calif. (AP) — Netflix’s video streaming service has surpassed 200 million subscribers for the primary time as its increasing line-up of TV sequence and films continues to captivate individuals caught at residence through the ongoing battle in opposition to the pandemic.
The subscriber milestone highlighted Netflix’s fourth-quarter outcomes launched Tuesday. The service added one other 8.5 million subscribers through the October-December interval, capping Netflix’s largest yr since its inception as a DVD-by-mail service in 1997. Netflix ended the yr with almost 204 million worldwide subscribers.
The fourth-quarter positive factors simply topped the projections of the roughly 6 million further subscribers projected by Netflix’s personal administration and Wall Road analysts, whilst the corporate started rolling out value will increase of 8% to 13% within the U.S. Netflix’s inventory surged by greater than 12% prolonged buying and selling after the newest subscriber numbers got here out.
After upending the DVD-rental trade, Netflix launched the then-revolutionary idea of streaming TV reveals and movies 14 years in the past. At the moment, its service had a mere 6 million subscribers.
The streaming service started to develop quickly seven years in the past when Netflix began producing its personal reveals and accelerated a worldwide enlargement that now spans greater than 190 nations. Because the February 2013 debut of its first authentic sequence, “House of Cards,” Netflix has attracted greater than 170 million further subscribers.
Netflix gained one other 37 million subscribers final yr, a 22% enhance from 2019. Its inventory fared even higher, rising by 67% final yr. The Los Gatos, California, firm now boasts a market worth of greater than $220 billion.
For all its success, Netflix nonetheless faces challenges within the coming years from bevy of deep-pocketed rivals, with maybe probably the most formidable posed by a extra skilled and even bigger leisure firm: Walt Disney Co.
After deciding to cease licensing its library to Netflix, Disney launched its personal video streaming service 14 months in the past. The service, Disney Plus, has proved much more standard than anybody imagined, accumulating almost 90 million subscribers in its first yr, emboldening the corporate’s administration to foretell that it’s going to boast as many as 260 million subscribers sooner or later in 2024.
“It is super impressive what Disney has done,” Netflix co-CEO Reed Hastings mentioned in Tuesday video dialogue with buyers. “It gets us fired up about increasing our membership and increasing our content production.”
To retain and appeal to subscribers, Netflix already had been spending a lot cash on authentic programming that the corporate often finally ends up shoveling out additional cash than its video providers brings in from its subscribers, though it has remained worthwhile below the accounting requirements allowed within the leisure trade.
The corporate earned $542.2 million on income of $6.64 billion within the fourth quarter, a comparatively skinny revenue margin.
However Netflix lastly stopped burning by money final yr, largely as a result of authorities restrictions imposed through the pandemic curtailed the manufacturing of programming. Netflix posted a optimistic money circulate of $1.9 billion throughout 2020, the primary time that has the corporate hasn’t had a detrimental money circulate for a complete yr since 2011.
In one other breakthrough, Netflix predicted it’s going to not want to lift extra money from lenders to assist finance its original-programming funds. The corporate mentioned it doesn’t count on to expertise the identical drain on its money because it has for many of the previous decade, even because it ramps up manufacturing of its authentic programming once more and gears as much as launch no less than one authentic movie per week on its service all through this yr.