Netflix missed its forecast for new US subscribers for the third straight quarter, conceding its price hikes and new competition have started to bite domestically. But overall the streaming giant added 8.8 million net subscribers in Q4 and raked in US$5.47 billion in revenue, according to financial results released this week.
In Q4 the US company added 423,000 domestic subscribers, short of its forecasted 600,000, but added 8.3 million subscriptions in overseas markets.
Netflix now has 167 million subscribers total, with 60.4 million in the US, and recorded a revenue of US$20.2 billion in 2019 for a net income of US$1.9 billion.
Netflix continues to face new competition from Apple and Disney, which both launched their own streaming services at a significantly lower prices last year. Locally, streaming rival Stan also offers a cheaper alternative.
But in a letter to shareholders, Netflix argued there are still plenty of eyeballs to go around as linear TV “wanes”.
“We have a big head-start in streaming and will work to build on that by focusing on the same thing we have focused on for the past 22 years – pleasing members,” the Q4 letter states.
“We believe if we do that well, Netflix will continue to prosper.”
On an earnings call overnight Netflix CEO Reed Hastings addressed the increased streaming competition.
“We’re growing in Q4 including in the US even with some of those noise from competitive launches … our per membership viewing grew not just globally but in the US through Q4 and continues,” Hastings said.
“So that bodes well for our long-term opportunity as long as we keep getting better.”
Netflix chief product officer Greg Peters all but ruled out a price cut in response to the competition.
“The money that our members give us every month and great stories and better product experiences creating more value for them then we occasionally earn the ability to come back to them and ask them for a little bit more money to keep that virtuous cycle of improvements going,” Peters said during the earnings call.
“And everything we’re seeing continues to support that core model’s intact.”