Streaming company Netflix has a great chance of survival when it comes to competition with Apple and Disney. Netflix added 8.8 million new subscribers during Q4 2019, surpassing expectations at a time when the company is facing heated competition from all corners of the OTT segment. Well, Netflix managed to hold its ground and successfully passed its first big test since Apple and Disney launched rival content streaming services.
Netflix had said it expected to add 7.6 million subscribers, and analysts thought the service would fare even better. The growth rate for Netflix during the said quarter [8.8 million] this year was significantly lower than in the same period last year [8.9 million]. The stock dropped about 2.5% immediately in after-hours trading, likely due to a cautious forecast for the first quarter. But shares rebounded and later traded up more than 2%.
Netflix now boasts more than 167 million subscribers worldwide, bolstered by a list of well-received movies and shows released late last year. The boost helps reaffirm Netflix’s strong standing in the increasingly crowded world of video streaming. The fourth quarter was an important milestone for Netflix, as it was marked its first head-to-head competition with Apple’s $5-per-month streaming service and Disney’s instantly popular $7-a-month option.
In spite of all this, the future is unknown and it’s unlikely to be a smooth road for Netflix. NBC, HBO, and startup Quibi are all planning to launch new streaming services soon. Netflix CEO Reed Hastings acknowledged the increased competition in a call following earnings but said he believes the services are mostly capturing new viewers who are transitioning from traditional TV watching.
“It takes away a little bit from us,” he said of the Disney Plus launch. “But again, most of the growth in the future is coming out of linear TV.”
Netflix’s most popular subscription plan comes at the price of $13 a month, far more than competitors from Disney, Apple, and Quibi. But its price is comparable to HBO Now, and it boasts one of the largest libraries of TV shows and movies, not to mention regularly updated original shows.
(With inputs / photo from AP)