This July 17, 2017, file photo shows a Netflix logo on an iPhone in Philadelphia. THE CANADIAN PRESS/AP-Matt Rourke

Netflix adds 16 million global subscribers partly during start of pandemic

Netflix shares edged up by less than one per cent in Tuesday’s extended trading

Netflix picked up subscribers in Canada to add nearly 16 million global customers during the first three months of the year, helping cement its status as one of the world’s most essential services in times of isolation or crisis.

The quarter spanned the beginning of stay-at-home orders in the U.S., Canada and around the world, a response to the coronavirus pandemic that apparently led millions to latch onto Netflix for entertainment and comfort when most had nowhere to be but home.

Netflix more than doubled the quarterly growth it predicted in January, well before the COVID-19 outbreak began to shut down many major economies. It was the biggest three-month gain in the 13-year history of Netflix’s streaming service.

The numbers — released Tuesday as part of Netflix’s first-quarter earnings report — support a growing belief that video streaming is likely to thrive even as the overall U.S. economy sinks into its first recession in more than a decade.

Over the past year, Netflix’s growth in the U.S. and Canada had slowed significantly. But the pandemic seems have to have reversed that trend for the moment. Netflix added 2.3 million subscribers in the U.S. and Canada in the first quarter, up from 1.9 million at the same time last year.

However, it’s unclear from the way Netflix discloses its numbers how many of the new subscribers are from Canada. The company briefly provided figures at the end of 2019 which shed light on its customer base across the country, but it now prefers to lump its operations into regions.

The company has previously said Canada represents roughly 10 per cent of its North American subscriber base, which would suggest it grew its subscribers here by 230,000 in Canada during the quarter, which compares to 125,000 paid sign-ups during the fourth quarter that ended Dec. 31, 2019.

“We’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption,” Netflix said in a statement.

READ MORE: ‘Every action counts’: B.C. reports 1 new death, 25 new cases of COVID-19

Investor optimism about Netflix’s prospects propelled the company’s stock to new highs recently, a sharp contrast with the decline in the broader market.

Netflix’s shares initially surged in after-hours trading after the first-quarter report came out, then drew back. The strengthening dollar will likely depress the company’s revenue from outside the U.S., including some of its fastest growing markets.

That’s one reason Netflix’s revenue only climbed 17 per cent from last year to US$5.8 billion, even though it ended March with nearly 183 million worldwide subscribers, a 23 per cent increase from the same time last year. Netflix earned US$709 million in the first quarter, nearly triple from last year.

Netflix shares edged up by less than one per cent in Tuesday’s extended trading to US$437.37, leaving them below last week’s record high of US$449.52.

Even though it faces plenty of competition, Netflix appears better positioned to take advantage of the surging demand for TV shows and movies largely because of its head start in video streaming.

Since beginning its foray into original programming seven years ago, Netflix has built up a deep catalogue that can feed viewer appetites even though the pandemic response has shut down production on many new shows.

That stoppage could hurt Netflix as well, although analysts at Canaccord Genuity believe its video library will serve as a “content moat” that can keep most competitors at bay.

Ted Sarandos, chief content officer, reassured investors in a video interview that he doesn’t foresee troubles with Netflix’s future releases, because seasons of TV series are produced in full, long before they hit the service, unlike many traditional network TV programs.

“Our 2020 slate of series and films are largely shot and are in post-production remotely in locations all over the world, and we’re actually pretty deep into our 2021 slate,” he said.

Sarandos pointed to production of “The Crown,” a dramatic series about the Royal Family, has already filmed and is “in finishing stages” for a release later this year.

But there will be a few smaller hurdles along the way as Netflix’s production gets accustomed to the impacts of COVID-19.

The company said that home isolation in countries across the world has made it impossible to produce dubbed versions of some of its original programs “in Italian and some other languages” because the voice talent can’t access the required equipment. Those affected titles would be released in April and May, but a representative was not certain which films or TV series would be impacted and couldn’t say whether the French-language translations were being produced.

Netflix said it hopes to get voice actors set up in their homes to record future dubs.

Among its biggest challengers in the market is Walt Disney Co., whose recently launched streaming service is also stocked with perennial classics, especially for children who have even more free time than usual.

That’s one of the big reasons Disney’s service has amassed 50 million subscribers and why Netflix is basking in another resurgence in popularity. Netflix predicted it will add 7.5 million subscribers from April through June. That’s nearly three times more than its average springtime gain of 2.7 million subscribers during the past seven years.

“Since we have a large library with thousands of titles for viewing and very strong recommendations, our member satisfaction may be less impacted than our peers,” Netflix boasted in its report.

— with files from The Associated Press

David Friend, The Canadian Press


Like us on Facebook and follow us on Twitter.

CoronavirusMovies and TV

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Surrey to pay TransLink $30M in land, $9M in cash for work on cancelled LRT

Council considered staff report on city’s 2019 annual financial statements during Monday’s “virtual” council meeting

Surrey RCMP promise enforcement at unofficial show ‘n’ shines

Cars have been impounded at the site in the last two years

‘There’s no playbook for this’: South Surrey sports organizations await approval to return to play

Local associations planning for modified summer seasons as COVID-19 restrictions ease

Local Chinese Canadians aim to counter COVID-19 backlash

Few racist incidents on Peninsula, says Community Engagement Society

Surrey now has second urgent and primary care centre, in Newton, premier says

Premier John Horgan noted that some 90,000 people in Surrey don’t have a family doctor

B.C. retirement home creates innovative ‘meet-up’ unit for elderly to see family face-to-face

Innovative ‘purpose-built’ unit keeps residents safe when seeing family for first time since COVID-19

B.C.’s essential grocery, hardware store employees should get pandemic pay: retail group

Only B.C.’s social, health and corrections workers are eligible for top-ups

Edmonton, Vancouver and Toronto vying to be NHL hubs, but there’s a catch

The NHL unveiled a return-to-play plan that would feature 24 teams

Help the ‘Cloverdale Reporter’ continue its mission to provide trusted local news

Facing changes together: Your community, your journalists

B.C. sees 9 new COVID-19 cases, one death as officials watch for new cases amid Phase Two

Number of confirmed active cases is at 244, with 37 people in hospital

Nanaimo senior clocked going 50 km/hr over limit says her SUV shouldn’t be impounded

RCMP say they can’t exercise discretion when it comes to excessive speeding tickets

United Way allocating $6.6M in federal funding to help with food security, youth mental health

Applications from Fraser Valley and Lower Mainland charities being accepted for the emergency funding

Illicit-drug deaths up in B.C. and remain highest in Canada: chief coroner

More than 4,700 people have died of overdoses since B.C. declared a public health emergency in early 2016

CMHC sees declines in home prices, sales, starts that will linger to end of 2022

CMHC said average housing prices could fall anywhere from nine to 18 per cent in its forecast

Most Read