Home Entertainment Netflix sees massive growth in subscriber numbers but warns of tough times ahead

Netflix sees massive growth in subscriber numbers but warns of tough times ahead

2 min read

With cinemas closed worldwide, it’s no surprise that people have turned to streaming for their entertainment fix and that Netflix is benefiting massively as a result. According to a recent letter to shareholders, the company has seen a massive increase and added over 15.8 million subscribers over the first three months of the year, more than double its initial target of 7.2 million That means Netflix has a massive global subscriber base of 182 million people now and quarterly revenue of nearly $6 billion.

That’s the kind of money that only a handful of entertainment companies can pull off and is perhaps the reason why the value of Netflix at the stock market has even surpassed that of Disney – whose fortunes have not fared well during this time. Even though Disney easily owns considerably more lucrative assets and has diversified its income in more areas and owns bigger entertainment property than Netflix, such is the fickle nature of the investment world.

Despite this massive growth, Netflix warns that things are not as rosy as they appear and they believe that this surge in traffic is simply a result of accelerated growth that would’ve occurred later anyway, so there is likely to be less growth in the future with the likelihood of a viewership decline once most global lockdown measures come to an end and people likely have a Netflix fatigue of sorts:

At Netflix, we’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption in the short to medium term. 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.

If there was ever proof that steaming is where the world’s entertainment future lies this is it. The biggest risk to the success of streaming lies rather in the competition and a possibly fragmented market that will come about as a result. There will be interesting times ahead in the entertainment world and it will be interesting to see how it will all change over the next year.

Last Updated: April 22, 2020

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

Netflix Thickens the MOTU Plot with Another Show

So the plot thickens… It would seem that Netflix has another MOTU show in the works that r…