LOS GATOS, CA – Netflix added 8.8 million new paid subscribers in its fourth quarter of 2018, higher than its internal forecasts, and pushing its worldwide customer base to 139 million.
The record number of additions included 1.53 million paid net adds in the U.S. and 7.31 million internationally, and the streamer said that the 26% jump in overall net gain was the biggest Q4 in its history.
In a note to shareholders that included its Q4 results, Netflix once again credited the success of its original content, adding that it is now “less focused” on second run content.
“We’re making significant investments in productions all over the world because we have seen that great stories transcend borders,” reads the note. “For example, Bodyguard (co-produced with BBC One, from ITV Studios) ranks as one of our most enjoyed co-productions. Baby, our second original series from Italy, and The Protector, our first Turkish original series, both saw strong viewing both inside and outside their home countries. All three of these debut seasons from around the world were each enjoyed by over 10 million member households in their first four weeks.”
Netflix claimed that it earned 10% of television screen time in the U.S. and “less than that” of mobile screen time away from its competitors, but those numbers are lower in other countries due to lower penetration.
“We compete with (and lose to) Fortnite more than HBO”, continues the note. “When YouTube went down globally for a few minutes in October, our viewing and signups spiked for that time. Hulu is small compared to YouTube for viewing time, and they are successful in the US, but non-existent in Canada, which creates a comparison point: our penetration in the two countries is pretty similar. There are thousands of competitors in this highly-fragmented market vying to entertain consumers and low barriers to entry for those with great experiences. Our growth is based on how good our experience is, compared to all the other screen time experiences from which consumers choose. Our focus is not on Disney+, Amazon or others, but on how we can improve our experience for our members.”
For the quarter, Netflix said that total revenue increased 27.4% year-over-year to $4.19 billion, though net income dropped to $134 million from $186 million in the same period last year.
Earlier this month, Netflix named Spencer “Spence” Neumann as its new CFO, replacing the departing David Wells.
