Netflix crossed a significant subscriber milestone this week, solidifying the company’s position as a major influence in Hollywood.
The streaming service, which was founded in 1997 as a DVD rental business, announced that it now has more than 200 million subscribers globally. The historic moment for the company was aided by the addition of 8.5 million subscribers in the fourth quarter of 2020, beating its own expectations.
The continued growth comes as competition in the streaming service industry rises. The new additions to the industry include Walt Disney’s Disney+, Apple’s Apple TV+, AT&T’s HBO Max, and Comcast Corp.’s Peacock.
The addition of these new services has affected Netflix. Beloved NBC show “The Office” came off the service at the end of 2020 and is now housed on Peacock, but Netflix remains the industry leader.
The biggest aid to the company’s growth during 2020 was the coronavirus pandemic. With many people stuck at home and movie theaters shut down, Netflix became the go-to service for millions. Over the course of 2020, Netflix added a record 37 million subscribers, which contributed to the 203.7 million users when the year ended. The year-end total is more than twice as many subscribers as it had a mere three years earlier.
“2020 was an incredibly difficult year with extraordinary loss for so many families, new restrictions that none of us have ever had to live with before and great uncertainty. We’re enormously grateful that in these uniquely challenging times we’ve been able to provide our members around the world with a source of escape, connection and joy while continuing to build our business,” Netflix said in an announcement.
Netflix’s fourth-quarter profit in 2020 sunk slightly to $542 million, down from $587 million in the same quarter from the previous year. Its revenue jumped 21% up to $6.6 billion. The company’s stock jumped as much as 12% in after-hours trading following the company’s earnings.
The company expects “paid net adds of 6 million” in the first quarter of 2021 compared to last year’s 15.8 million “paid net adds,” which included the impact from the initial pandemic lockdowns.
The streaming service also has kept up its catalog of original content while the majority of television networks continue to suffer from production shutdowns due to the pandemic. According to Netflix, the company currently has more than 500 titles in post-production or ready to launch on the streaming service. Last week, the company unveiled its movie slate that will have a new release on the platform every week of 2021.
The company also currently anticipates 2021 cash flow to come in at break-even. The projection is an upgrade from its earlier one, which was minus $1 billion to break-even. Netflix said it is considering returning some cash to its shareholders through stock buybacks.
“It’s a great time to be a consumer of entertainment. There are a wealth of options ranging from linear TV to video gaming to user generated content. 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 said.