Netflix released its first-quarter earnings report today, and the company saw another period of strong growth, adding more than 3 million streaming members, bringing its total to 36 million. Domestically, Netflix saw 2 million new streaming members, which was relatively equal compared to last quarter and up from 1.74 million in Q1 last year.
Helping Netflix along in its rebound after the split of its business, which caused a big customer backlash, has been the company’s focus on original programming, beginning with its first “major” TV series, House of Cards. Netflix just recently launched its second original series, Hemlock Grove, and on May 25th will feature the much-anticipated debut of Arrested Development. However, the question has been whether or not Netflix’s new shows would significantly add to its member total — or whether people would sign up for a month to get the shows for free and then cancel.
In its letter to shareholders today, Netflix said that in spite of the fact that “some investors were worried that the House of Cards fans would take advantage of its free trial, watch the show and then cancel,” there was, in fact, very little “free-trial gaming” as the company calls it — fewer than 8,000 people signed up to watch it for free and then cancelled — out of what the company says were “millions of free trials in the quarter.”
Herein, Netflix is just talking about the free trial portion of its service, whereas the other question has been whether or not the new members the company has been able to attract through House of Cards would actually stick around. And it seems that, from its 2 million new members, it was actually able to retain those new customers.
“The launch of House of Cards provided a halo effect on our entire service and spoke to the quality of experience members can expect from Netflix,” the executives said in their letter to shareholders this afternoon. In fact, the good news for Netflix is that, so far, Hemlock Grove seems to be attracting the same amount of attention, if not more than House of Cards.
“Hemlock Grove was viewed by more members globally in its first weekend than was House of Cards and has been a particular hit among young adults,” the company said in its letter. However, on the other hand, that goodwill may be short-lived. According to reviews from Metacritic, people aren’t exactly loving Hemlock Grove — in fact most seem to think it’s awful. The AV Club goes so far as to give Hemlock an “F.” So there’s that.
That could change, after all. The show hasn’t been out very long. Netflix just made all 13 episodes available three days ago. At the same time, it wouldn’t be surprising if Netflix were to go through a little bit of a hangover after House of Cards — or to learn that it has dedicated more capital, advertising, etc. to its first big splash (House of Cards) and its much-anticipated comedy (Arrested Development) than Hemlock. However, that’s just speculation at this point and only time will tell.