As many countries around the world urge their citizens to stay at home while we fight the coronavirus pandemic, many are finding novel ways to keep busy, keep active and keep healthy. As you would imagine, though, many more people are binging shows and movies like never before. As a result, Netflix has just announced its biggest quarter ever.
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In a call to investors, Netflix has revealed that in Q1 2020 they brought in an additional 15.8 million paid customers around the world. This was more than double the number of new subscribers that Netflix had projected for the quarter before the coronavirus pandemic. External analysts had factored in some additional growth due to the current state of the world, but still only expect 8.2 million new subscribers.
As a result of the better than expected results, their stock price has been going up significantly in recent days. Netflix’s market capitalisation is now more than $190 million, which makes it more valuable than Disney. They are sure to remain bitter adversaries in years to come as the House of Mouse builds Disney+ into a competitive streaming service.
Netflix reported $709 million net income for Q1 2020, compared to $344 million net income for the same period in 2019. Its investors will receive diluted earnings per share of $1.57, its highest ever, and expects it to rise to $1.87 in Q2 2020.
According to Danyaal Rashid, an analyst at the data firm GlobalData, there are a couple of reasons why Netflix is performing much better than Disney. “Firstly, unlike Netflix, Disney is reliant on ad revenues due to its broadcast offerings, and this revenue stream is drying up rapidly. Secondly, COVID-19 has forced Disney to close its theme parks, which generate more than a third of its revenues, delivering a huge hit to the company’s top line,” he said.
Many people are struggling to make ends meet with economies around the world suffering. But as we’ve seen in South Africa as well, people value their TV entertainment more than most other nice-to-haves when times are tough.
