Netflix subscribers exceed 200m

Netflix’s video streaming service has surpassed 200 million subscribers for the first time as its expanding line-up of TV series and movies continues to captivate people stuck at home during the ongoing battle against the pandemic.

The subscriber milestone highlighted Netflix’s fourth-quarter results released Tuesday. The service added another 8.5 million subscribers during the October-December period, capping Netflix’s biggest year since its inception as a DVD-by-mail service in 1997. Netflix ended the year with nearly 204 million worldwide subscribers.

The fourth-quarter gains easily topped the projections of the roughly 6 million additional subscribers projected by Netflix’s own management and Wall Street analysts, even as the company began rolling out price increases of 8 percent to 13 percent in the U.S. Netflix’s stock surged by more than 12 percent extended trading after the latest subscriber numbers came out.

After upending the DVD-rental industry, Netflix introduced the then-revolutionary concept of streaming TV shows and films 14 years ago. At that time, its service had a mere 6 million subscribers.

The streaming service began to grow rapidly seven years ago when Netflix started producing its own shows and accelerated a worldwide expansion that now spans more than 190 countries. Since the February 2013 debut of its first original series, “House of Cards,” Netflix has attracted more than 170 million additional subscribers.

Netflix gained another 37 million subscribers last year, a 22 percent increase from 2019. Its stock fared even better, rising by 67 percent last year. The Los Gatos, California, company now boasts a market value of more than US$220 billion.

For all its success, Netflix still faces challenges in the coming years from bevy of deep-pocketed rivals, with perhaps the most formidable posed by a more experienced and even larger entertainment company: Walt Disney Co.

After deciding to stop licensing its library to Netflix, Disney introduced its own video streaming service 14 months ago. The service, Disney Plus, has proved far more popular than anyone imagined, accumulating nearly 90 million subscribers in its first year, emboldening the company’s management to predict that it will boast as many as 260 million subscribers at some point in 2024.

“It is super impressive what Disney has done,” Netflix co-CEO Reed Hastings said in Tuesday video discussion with investors. “It gets us fired up about increasing our membership and increasing our content production.”

To retain and attract subscribers, Netflix already had been spending so much money on original programming that the company usually ends up shoveling out more cash than its video services brings in from its subscribers, although it has remained profitable under the accounting standards allowed in the entertainment industry.