Netflix Exceeds Subscriber Goals Despite Slight Revenue Miss
Netflix surpasses expectations by adding 8.8 million subscribers in the fourth quarter and reporting record viewership for original films like Bird Box. However, a minor revenue shortfall causes a slight dip in the company's after-hours stock price.
Netflix releases its fourth quarter earnings report with mixed results compared to Wall Street expectations. The streaming giant adds 8.8 million subscribers, beating its own forecast of 7.6 million, and reports earnings per share of 30 cents, which surpasses analyst predictions of 24 cents. Despite these wins, revenue falls slightly short at $4.19 billion against the expected $4.21 billion, causing shares to drop about 2 percent in after-hours trading.
The report highlights massive viewership numbers for Netflix original content, proving the platform's self-sufficiency. The hit film "Bird Box" reaches over 45 million accounts in its first week and is on track to hit 80 million households in four weeks, while shows like "You" and "Sex Education" are set to exceed 40 million views. Netflix notes that it only counts a viewer if they watch at least 70 percent of a title, and states that originals now make up the majority of unscripted viewing on the service.
As competition in the streaming space grows, Netflix emphasizes its unique position in the broader entertainment market. The company claims to account for 100 million hours of daily viewing on U.S. TV screens, roughly 10 percent of the total, and admits it competes with the video game "Fortnite" more than HBO. Netflix makes it clear that while it pays top dollar for second-run content, it relies on its own incredible originals to keep members happy if other studios withhold their shows for competing platforms.