Netflix capped off a year of impressive streaming growth by adding 8.5 million net new paying subscribers during the fourth quarter.
That means the streaming giant now has a total of 204 million paying subscribers worldwide — net growth of 37 million new subscribers for the full year, up from 28 million net additions in 2019.
The company also reported that it brought in $6.64 billion in revenue and earnings per share of $1.19 during Q4, compared to analyst predictions of $6.63 billon in revenue and EPS of $1.39.
In response to the earnings report, Netflix shares were up 12.4% in after-hours trading (as of 4:43 p.m. Eastern).
Looking ahead, Netflix projected that it will add 6.0 million new subscribers in the first quarter of 2021 — the same as its old forecast for Q4, and less than half the 15.8 million subscribers that Netflix added in Q1 2020 (right as lockdowns were beginning in the United States).
The company’s investor letter also highlights a number of hit titles from the quarter, projecting that 72 million households will “choose to watch” (watch at least two minutes of) “The Midnight Sky” in its first 28 days of release, while 68 million households chose to watch “Holidate.” It also said the most recent season of “The Crown” was its most popular yet, with more than 100 million households choosing to watch the show “since its initial launch.”
“In addition to titles with big viewership, we also aspire to have hits that become part of the cultural zeitgeist,” Netflix said. “In 2020 alone, we had ’Tiger King,’ ‘Bridgerton’ and ’The Queen’s Gambit.’ … In fact, Netflix series accounted for nine out of the 10 most searched shows globally in 2020, while our films represented two of the top 10.”
The company acknowledged growing competition from new(-ish) streaming services like Disney+, Peacock and HBO Max, but its user numbers still put it far ahead of any streaming competition — Disney+, for example, had 86.8 million subscribers as of early December (Disney’s service launched a little over a year ago and is still rolling out globally).
“Our strategy is simple: if we can continue to improve Netflix every day to better delight our members, we can be their first choice for streaming entertainment,” Netflix said. “This past year is a testament to this approach. Disney+ had a massive first year (87 million paid subscribers!) and we recorded the biggest year of paid membership growth in our history.”
EMarketer analyst Eric Haggstrom made a similar point in a statement:
Netflix ended 2020 on a high note, adding over 36 million subscribers and passing 200 million subscribers. Despite increasing competition from Disney and others, Netflix had its strongest year yet and will look to grow further in 2021, with a strong content release slate already planned. So far, Netflix has been a clear winner of the streaming wars.
Update: I should add an important point that wasn’t noted in my initial story — the earnings report also says that with Netflix’s $8.2 billion cash balance and $750 million undrawn credit facility, “We believe we no longer have a need to raise external financing for our day-to-day-operations.”