Netflix share up 12% after company said paid subscribers rose 8.5m in the holiday quarter as cold weather and new closures begin
- Netflix said Tuesday it added 8.5 million new subscribers during the holiday quarter
- Originals such as Bridgerton and The Queen’s Gambit fueled the growth
- Refusal came because many people hide under lock and key in colder weather
- Netflix shares rose as much as 12% on Tuesday
Netflix shares rose Tuesday after the streaming company reported an increase in new subscribers for the holiday quarter, beating Wall Street estimates.
The company said it added 8.51 million paid subscribers during the quarter ended December 31, according to Refinitiv analysts’ IBES data estimates of 6.1 million.
It was a major setback in subscriber growth after a sluggish third quarter, in which Netflix added only 2.2 million paid users.
In the fourth quarter, Netflix original articles like Bridgerton and The Queen’s Gambit helped the service attract more viewers, many of whom hide at home due to new COVID-19 restrictions and as winter declines.
Netflix acknowledged in a letter to shareholders that it is facing greater competition and said it will continue to pour money into original articles like ‘Bridgerton’ (above).
The growth of subscribers per year is seen in this chart released by Netflix on Tuesday
Shares of Netflix rose as much as 12 percent on Tuesday
Shares of Netflix rose as much as 12 percent on Tuesday, when the quarterly results were announced.
It was the latest twist in ‘Streaming Wars’, with Netflix acknowledging in a letter to shareholders that it is facing strong competition from HBO Max, Disney + and others.
“The huge growth in streaming entertainment has allowed experienced competitors such as Disney, WarnerMedia and Discovery to compete with us in new ways, which we have been expecting for many years,” the letter reads.
“This is partly why we have moved so fast to further expand and strengthen our original content library across a wide range of genres and nations.”
Netflix now has 203 million paid subscribers worldwide, versus Disney + with 86.8 million paid subscribers worldwide.
In the fourth quarter, Netflix originals like ‘The Queen’s Gambit’ (above) helped the service attract more viewers hiding at home.
HBO Max reports 38 million ‘activations’ in the US, but that includes 12.7 million who already pay for the content via their cable package.
Netflix reported $ 6.64 billion in fourth-quarter revenue on Tuesday, exceeding expectations.
Earnings per share were $ 1.19, lower than the $ 1.39 analysts had expected.
Netflix said it would no longer be necessary to raise external funding for day-to-day operations, and even to investigate cash to shareholders through share buybacks.
The last time Netflix pursued repurchase was 2011, when it switched from DVDs by mail to streaming.