US-listed streaming service Netflix (NASDAQ:NLFX) has announced a significant jump in the number of new subscribers in the first quarter as new users seek new forms of entertainment during imposed lockdowns.
Revenue in the first quarter grew to $5.7 billion up from $4.5 billion in the first quarter of 2019.
Hit new shows such as ‘Tiger King’ were instrumental in attracting the number of new subscribers. Tiger King was watched by 64 million households and caused a storm on social media likely driving people to sign up up to Netflix and watch it.
Netflix are one of the beneficiary companies of the coronavirus lockdown as home-orientated services become almost essential. Almost 16 million people signed up to Netflix in the first quarter globally.
Netflix touched on this in a letter to shareholders as well as the higher level of engagement levels of existing users.
“In our 20+ year history, we have never seen a future more uncertain or unsettling. The coronavirus has reached every corner of the world and, in the absence of a widespread treatment or vaccine, no one knows how or when this terrible crisis will end. What’s clear is the escalating human cost in terms of lost lives and lost jobs, with tens of millions of people now out of work.”
“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. We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.”
Shares in Netflix initially spiked higher in the US premarket but eased off to trade at $435 as market approached the US cash open.