Netflix chief executive officer Reed Hastings has reported revenue surpassed US$4.5 billion in Q1 and the streaming TV platform recorded the highest quarterly paid net adds in its history (9.6m, up 16% year over year). “For 20 years, we’ve had the same strategy: when we please our members, they watch more and we grow more,” said Netflix in a note to shareholders.
In Q1 2019, average streaming paid memberships increased 26% year over year.
Paid net adds in Q1 were 9.6 million (with 1.74m in the US and 7.86m internationally), up 16% year over year, representing a new quarterly record.
For Q2 2019, Netflix is projecting total subscriber growth of 5.0m (-8% year over year), with 0.3m in the US and 4.7m for the international segment. This would mean 14.6m paid net adds for the first half of 2019, up 7% year over year.
Netflix commented on price rises and content:
We’re working our way through a series of price increases in the US, Brazil, Mexico and parts of Europe. The response in the US so far is as we expected and is tracking similarly to what we saw in Canada following our Q4 2018 increase, where our gross additions are unaffected, and we see some modest short-term churn effect as members consent to the price change.
We’re looking forward to a strong slate of global content in the second half of the year, including new seasons of some of our biggest series, Stranger Things (July 4th), 13 Reasons Why, Orange is the New Black, The Crown and La Casa de Papel (aka Money Heist) as well as big films like Michael Bay’s Six Underground and Martin Scorsese’s The Irishman, and expect another year of record annual paid net adds in 2019.
We program Netflix with a wide breadth of content to satisfy the diverse tastes of our nearly 150m paid members and the hundreds of millions of people we hope will one day join Netflix. We continue to see big successes across our programming categories.
For Q1 2019, in scripted English language TV, we premiered another big hit in Umbrella Academy, based on the comic book by Gerard Way and Gabriel Bá, which has been watched by 45 million member households in its first four weeks on service.
Our original films effort built on the momentum from our Q4 blockbuster Bird Box with Triple Frontier, starring Ben Affleck and directed by J.C. Chandor. This action/heist movie has been watched by over 52 million member households in its first four weeks on Netflix.
The Highwaymen (starring Kevin Costner and Woody Harrelson as two lawmen that bring Bonnie and Clyde to justice) is on track to being watched by over 40 million member households in its first month.
Our documentary feature FYRE: The Greatest Party That Never Happened has been watched by over 20 million member households in its first month on Netflix.
In early April, we unveiled Our Planet, our most ambitious entry into the popular nature documentary genre. More than four years in the making and shot in 50 different countries, Our Planet is off to a strong start and is tracking to be one of our most successful global documentary series launches yet, with over 25 million member households projected to watch in the first month of release.
We launched our originals effort for the unscripted genre two years ago with several successful English-language formats like the light hearted cooking competition Nailed It! We’re building on that success by launching locally adapted versions in Mexico, France, Germany and Spain. Nailed It!: México was the first and launched on February 8, achieving three times more first-month watchers in Mexico than the dubbed US version.
Ted Sarandos to oversee marketing too
Netflix CMO Kelly Bennett will be retiring this year after a seven year run. During this time, Netflix said Kelly was a key contributor to the transformation of Netflix from a primarily domestic service with only 2nd run content to a global service launching an unprecedented amount of original programming.
The company announced Ted Sarandos has led content for nearly 20 years here, and is ready to run both content and marketing, so he is leading the search for the new CMO, who will report to him.
Product and partnerships
Netflix said it has been expanding its bundling initiative and is now distributing Netflix through 10 different operator bundles across the globe.
“To date, these bundles have had a positive effect on our business, driving incremental acquisition at similar economics to other partnerships where Netflix is offered ȧ la carte.”
Netflix to test top 10 charts for first time
For subscribers who are frustrated when it comes to searching for its most popular content, Netflix had an announcement for you today:
Later in Q2 we’ll be running a test to improve our UK member experience by releasing weekly top 10 lists of the most popular content on our UK service across various programming categories. For those who want to watch what others are watching, this may make choosing titles even easier. After a few months we’ll decide whether to end or expand the test.
Netflix also did something it often doesn’t do, comment on competition:
Recently, Apple and Disney each unveiled their direct-to-consumer subscription video services. Both companies are world-class consumer brands and we’re excited to compete; the clear beneficiaries will be content creators and consumers who will reap the rewards of many companies vying to provide a great video experience for audiences.
We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on demand entertainment is so massive and because of the differing nature of our content offerings. We believe we’ll all continue to grow as we each invest more in content and improve our service and as consumers continue to migrate away from linear viewing (similar to how US cable networks collectively grew for years as viewing shifted from broadcast networks during the 1980s and 1990s).
Top Photo: Olivia Colman in The Crown season three