What's going on?
Netflix – which received 24 Oscar nominations this year, more than any other studio – would like to thank its parents, its agent, and – sniffle – its investors for better-than-expected fourth-quarter results late on Tuesday.
What does this mean?
The streaming giant’s quarterly revenue was 31% higher than the same time last year, and a little more than investors expected – and its profit beat forecasts too. That was partly thanks to the 8.8 million subscribers it added globally: a big jump from the 7.6 million it promised it would deliver.
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 last week, it won’t need as many new Netflix-and-chillers to hit its revenue target – or to keep paying for that sweet, sweet content.
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. Finimize Premium members have predominantly been in the Disney+ camp, thanks to both its 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 – and with 62% of analysts positive on Netflix’s stock and 80% positive on Disney’s, investors may well agree (tweet this).
For markets: And they’re off!
US tech comprises almost 20% of the US stock market, which itself makes up 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 Tuesday’s update.