What’s Going On Here?

Netflix reported better-than-expected fourth-quarter results.

What Does This Mean?

The streaming giant’s quarterly revenue was 31% higher, and a little more than investors expected – and its profit beat forecasts too. That was partly thanks to the added 8.8 million subscribers – a big jump from the promised 7.6 million.

Netflix only plans to add 7 million paying subscribers this quarter, versus the 7.8 million investors were hoping for. But given that the company raised US subscribers’ prices, it won’t need as many new Netflix-and-chillers to hit its revenue target.

Why Should I Care?

For you personally: Survival of the fittest.

The streaming services are fighting a battle on multiple fronts: viewership, subscriptions, and now, backing from investors. But which service or services will win the war remains to be seen. 

• Disney+ has a better-than-expected launch last year and its monopoly on Marvel and Star Wars content.
• But Netflix’s strong quarter might mean there’s room for more than one winner.

For markets: And they’re off!

US tech comprises almost 20% of the US stock market and almost half the global stock market – making their updates important to investors all over the world.

And investors appeared to be pretty positive ahead of Netflix’s tech curtain-raiser: its stock had already risen over 20% in the last three months, and analysts’ earnings estimates had climbed too. That might explain why Netflix’s stock didn’t rise much after the update.

Content source: Finimize. (2020) Exclusive: Awards Season. Available from: https://www.finimize.com/wp/news/awards-season/ [Accessed 22 January, 2020]