Netflix is holding its ground in the streaming wars, passing its first big test since Apple and Disney launched rival services.
The company announced it added 8.8 million worldwide subscribers during its fourth quarter, surpassing expectations at a time when it faces heated competition.
Netflix had said it expected to add 7.6 million subscribers. The increase pales slightly next to the 8.9 million subscribers the service added in the fourth quarter of 2018.
The company now boasts more than 167 million subscribers worldwide, bolstered by a list of well-received movies and shows released late last year. That includes the fantasy show “The Witcher” and Oscar nominees “The Irishman” and “Marriage Story.”
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.
Still, Netflix will soon face the compatition from NBC, HBO and startup Quibi, which are all planning to launch new streaming services.
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 has an advantage over competitors, as the company holds valuable information about viewers' habits and preferences,
Netflix’s most popular plan costs $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.
Hastings once again said that Netflix isn’t interested in introducing ads. Noting that the digital advertising market is dominated by companies such as Google, Amazon and Facebook, he said, “there’s not easy money there.”
In the U.S., Netflix added 420,000 subscribers. Growth in its home country has been slowing in the last year, partly because most people in the U.S. who want Netflix already subscribe.
The company reported profit of $587 million on revenue of $5.47 billion, exceeding expectations.
Netflix said it expects to add 7 million subscribers during the first three months of this year.