Emma Corrin as Princess Diana in Netflix’s “The Crown” Season 4
(Courtesy of Des Willie/Netflix)
Netflix powered past the 200 million subscriber mark in 2020 to cap its biggest-ever year of growth, driven by viewership gains during COVID-19.
In the fourth quarter of 2020, Netflix added 8.51 million paid streaming subscribers, about 2.5 million more than expected to stand at 203.7 million worldwide at the end of the year.
Netflix previously forecast 6 million global paid net adds for Q4 (down from 8.8 million in the year-prior quarter), after the streamer saw a pandemic-driven boom in the first half of 2020. For the full year, Netflix gained 36.6 million streaming customers — its highest annual gain, beating its previous record of 28.6 million in 2018.
On the subscriber beat, shares of Netflix popped more than 12% in after-hours trading Tuesday.
Netflix reported revenue of $6.64 billion and earnings of $1.19 per share for Q4. Wall Street analysts on average had expected Netflix to post Q4 revenue of $6.63 billion and earnings per share of $1.39, according to Refinitiv.
Netflix said it has more than 500 titles currently in post production or “preparing to launch.” That includes its massive 2021 film slate of 71 titles — with plans to debut at least one new movie every week of the year.
The strong Q4 subscriber results come as the No. 1 SVOD player faces stepped-up competition from a slew of rivals including Disney Plus, Hulu, HBO Max, Peacock, Discovery Plus, Paramount Plus and Amazon Prime Video.
The raft of competitors “signifies that these companies all recognize the future is streaming entertainment, a vision we have been working towards since inception,” Netflix said in its Q4 letter to shareholders. “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. This past year is a testament to this approach.” The company tipped its hat Disney Plus, acknowledging the service’s “massive first year” with 87 million paid subscribers.
For the first quarter of 2021, Netflix expects paid net adds of 6.0 million compared with the record 15.8 million in the year-ago quarter, which the company noted “included the impact from the initial COVID-19 lockdowns.” The company forecast Q1 revenue of $7.13 billion and EPS of $2.97, with net income projected at $1.36 billion — nearly double the year-earlier period.
Netflix also delivered the higher-than-expected subscriber number for Q4 also as the company raised prices on its most popular plans in the U.S during the quarter, with the Standard two-stream HD plan going up a dollar from $12.99 per month to $13.99.
On a cash basis, Netflix spent $11.8 billion on streaming content in 2020, versus $13.9 billion the year prior. However, that’s only one picture of the company’s total programming budget: Netflix also has content payments due over several years, and those content obligations totaled $19.5 billion at the end of 2019 per its annual 10-K filing.
In the Q4 shareholder letter, Netflix referred to the “Shuffle Play” button it has been testing for several months on connected TV platforms. The company said it expects to officially roll out the feature, which streams a random title based on a user’s viewing history or playlists, in the first half of 2021.
Variety's Todd Spangler contributed to this post.