The streaming giant Netflix has more than doubled its own forecast of new customers with millions of quarantined audiences turning to series and movies, but the company predicts a weaker second half if the quarantine is lifted.
The world’s largest streaming service has gained 15.8 million paying customers from January to March. Bringing its global total to 182.9 million. Netflix predicted that it would add only 7 million over this period.
The company, however, warned that it expected fewer new subscribers from July to December compared to the previous year. Many people who joined the company are probably already registered, the executives said.
“We expect membership numbers to decrease and membership growth to slow as home confinement ends,” Netflix said in a letter to shareholders.
Netflix is a big confinement winner with 182.9 million subscribers
The company is one of the few companies to take advantage of government decrees imposed in March to distance people from each other in order to stop the spread of the new highly infectious coronavirus.
Netflix also released optimistic forecasts that it would add 7.5 million new customers for the current quarter, which ends in June. This is although the company said it was “mostly guesswork” given the uncertainty as to when home stay orders could be lifted.
Netflix said the shutdown of film and television production worldwide has temporarily increased its free cash flow. But may delay the scheduling of certain programs. In the second quarter, the impact will be “modest” and will mainly concern dubbing in different languages, the company said.
“Most of the programs for 2020, and much of 2021, have already been filmed”. Said Ted Sarandos, content director, in an interview with an analyst.
“We don’t plan to move the programming much, certainly not in 2020,” said Mr. Sarandos.
For the quarter just ended, earnings per share for Netflix did not live up to analysts’ expectations. The company posted diluted earnings per share of $1.57, below the consensus of $1.65, according to IBES data from Refinitiv.
Total revenue rose from $ 4.52 billion to $ 5.77 billion. On average, analysts had forecast $ 5.76 billion.