The considerable surge in video streaming service company Netflix is expected but the doubling of its subscriber forecast is a surprise. In its first-quarter(Q1) report, the company reported a 22.8% increase or 15.8 million subscribers year over year more than double the 7.2 million that was expected.
In the process, Netflix saw quarterly revenue of $5.8 billion up by 29% during the same period last year and slightly higher than the estimate of $5.76 billion. The total number of subscribers now stands at 183 million — 19.8 million from the Asia Pacific (APAC) and 62% from outside of the United States. APAC contributed $484 million to the revenue in Q1, up 51.3% year-over-year.
The lockdowns forced companies to implement work-from-home arrangements while students are required to have online classes to put a semblance of normalcy and avoid massive disruption in everyday lives. When the coronavirus that causes COVID-19 spread like wildfire and was eventually categorized as a pandemic, people knew that video streaming services would fill in the gap left by outdoor activities.
In the Letter to Shareholders, Netflix said this surge in viewing and increased membership may be temporary.
To accommodate the unexpected need for its services, the company slightly reduced video quality especially in areas where internet service is less than ideal.
The company also halted product innovations but still come up with the latest releases “that we know will add meaningful value for our members, such as improved parental controls.”
$150 million support
“When it comes to production, almost all filming has now been stopped globally, with the exception of a few countries like Korea and Iceland,” Netflix said. “This has been devastating for millions of workers in the TV and film industry — electricians, hair and make-up artists, carpenters and drivers who are often paid hourly wages and work project-to-project.”
Netflix also committed a total of P150 million to support the entertainment industry. It created a $100 million fund the hardest-hit workers including the crews. The company is donating $30 million to non-profits, providing emergency relief to the out-of-work crew and cast across the broader TV and film industry in countries where we have a large production base.
“Netflix employees have been outstanding and to help them support their local communities, we’ve doubled our charitable match giving program for 2020,” the company said. “So for every $1 donated by our employees to an organization, we now donate an additional $2 to that organization. “