Netflix has again beaten analyst expectations and added 7.41 million new subscribers in Q1, according to the streaming giant’s latest results. That number exceeds analysts’ forecasts of 6.32 million and takes Netflix’s total subscriber base to 125 million.
Q1 revenue was US$3.7 billion, up from US$2.6 billion in Q1 2017. That’s a 43 per cent growth year-on-year and the fastest pace in the history of Netflix’s streaming business, according to a letter to shareholders. Netflix shares rose on the news.
But Netflix CEO, Reed Hastings, says the company can’t afford to be complacent as over the top competition grows.
“The consumer has a lot of entertainment options. And then whether our share of that grows or shrinks is really up to, do we produce great content, market it well, serve it up beautifully?” Hastings said on an earnings call.
“And if we do that really well, if we earn more of consumers’ time, then we continue to grow. And if we get lazy or slow, we’ll be run over, just like anybody else.”
According to Hastings, Netflix captures only “a fraction of the hours” of linear TV and Youtube.
“We’ve got some great momentum, and we’re very excited about that, but we have a long way to go in terms of earning all of the viewing that we want to,” Hastings said.
No ads, no worries
When asked to comment on the recent data privacy concerns in the tech industry, Hastings said the subscription model had helped protect Netflix from some of the backlash around the nefarious use of data in advertising world.
“We’re very different from the ad-supported businesses, and we’ve always been very big on protecting all of our members’ viewing,” Hastings said.
“We don’t sell advertising. So I think we’re substantially inoculated from the other issues that are happening in the industry, and that’s great.”
Hastings also pointed out the Netflix spends $10 billion on content and marketing versus $1.3 billion on tech.
“We’re much more of a media company in that way than pure tech. Now of course, we want to be great at both, but again, we’re really pretty different from the pure tech companies,” he said.
Hastings said he has fostered a culture of information sharing and employee input at Netflix, unlike some other tech giants.
“We’re like the anti-Apple. They compartmentalise, we do the opposite. Everyone gets all the information,” Hastings said during a Ted Talk in Vancouver.
“I find out about big decisions made all the time that I had nothing to do with.”