Netflix announced that within the first quarter of 2020, the streaming giant has managed to add over 15 million new paid users to its platform. In addition to this, the company claims to have earned record revenue during the quarter, enabling the platform to push for higher targets, as it looks to compete with Amazon and Disney in the ecosystem.
Both the revenue and susbcriber figures have beaten the estimates, and with the lockdown, it’s likely that Netflix will come back in the next quarter with similar or even better returns. But strangely, Netflix is keen for the lockdown situation to ease, which will help thegrowth to decelerate.
“Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth. In our case, this is offset by a sharply stronger US dollar, depressing our international revenue, resulting in revenue-as-forecast. We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon,” as mentioned by Netflix in this statement.
With its quarterly growth, the company now caters to over 180 million paid users on its platform, but we still don’t know the figures for India’s contributuon to Netflix. In comparison to this, Hotstar, owned by Disney, has over 300 million users on its network, and another 8 million have been added since Disney+ launched in the country few weeks back.
Netflix has pointed out that once the lockdown effect wears down, and people start venturing out once again, its user additions are likely to normalise, and by next quarter in 2020, the company expects to add less than 10 million users later this year. “Hopefully, progress against the virus will allow governments to lift the home confinement soon. As that happens, we expect viewing and growth to decline,” the statement adds.
The streaming platform has been asked to reduce its video quality in many parts of the world, to make sure the internet providers don’t feel the burden of people using their home broadband, putting a strain on their network. “Using our Open Connect technology, our engineering team was able to respond immediately, reducing network use by 25 percent virtually overnight in those countries, while also substantially maintaining the quality of our service, including in higher definition,” Netflix explained.
This was also adopted by other platforms like YouTube, Facebook and Hotstar among others in the Indian market, which is likely to remain till first week of May.