Video streaming service Netflix has garnered 16 million new subscriptions for the first three months of 2020 as global lockdowns keep people at home.
According to Netflix, it received almost 16 million new subscriptions in the first quarter of the year as the coronavirus pandemic forced governments around the world to implement lockdowns to keep people at home.
This was almost double the number of new accounts created in the final months of 2019. However, Netflix pointed out that the lockdowns also halted "almost all" filming around the world.
Additionally, the sharp falls in the value of numerous currencies globally meant that new subscriptions outside the US were not worth as much to the company as they would have been prior to the pandemic, affecting its international revenue growth.
On the other hand, Netflix's share price has surged by over 30% this year as investors bet on on the home entertainment company's ability to benefit from people spending more time at home.
Eric Haggstrom, an analyst for eMarketer, said: "Netflix is and will continue to be the media company least impacted by Covid-19. Their business is a near perfect fit to a population that is suddenly housebound."
Netflix and the surge in demand
In March, Netflix announced that it would reduce the quality of its videos in Europe to keep the internet from collapsing due to the massive surge in usage amidst the coronavirus pandemic.
The company also added 2,000 customer support personnel to handle the increased demand.
According to the streaming giant, around 85 million people had watched its original movie, Spenser Confidential, for at least two minutes, the cut-off time it uses for viewing figures. It also claimed that 64 million viewers have seen the documentary series Tiger King.
Demand Forecasts
Netflix forecasts an additional 7.5 million subscribers in the three months to the end of June, which is beyond analysts' projections. However, it warned investors that as governments lift lockdowns globally, viewers and growth would decline.
The company said: "Given the uncertainty on home confinement timing this is mostly guesswork."
Netflix also announced that it would push through with its scheduled releases through June and has continued to acquire other films to add to its new offerings.
However, there is a possibility that future membership could be affected by the delays to upcoming seasons and shows.
Paolo Pescatore, an analyst at PP Foresight, pointed out that production delays would ultimately impact subscriber growth across all streaming companies in coming months but said: "Arguably, Netflix should fare much better with its broad catalogue."
New and upcoming competition
On April 6, the video streaming app Quibi launched. The app streams video clips 10 minutes or shorter while movies are broken into segments.
The service boasts its feature called Turnstile, which allows viewers to keep the image full-screen, whether they hold their phone in landscape or portrait mode.
In its first week, it reached reached 1.7 million downloads, according to Quibi CEO Meg Whitman.
WarnerMedia will launch its HBO Max service on May 27 while NBCUniversal will debut its Peacock streaming service on July 15.
