Five way the Coronavirus pandemic has influenced Netflix

Atta Ur Rehman KhanWeb Editor & Columnist

22nd Oct, 2020. 01:02 pm
Five Aspects The Pandemic Has Influenced Netflix
  1. Demand is declining-much more than predicted by Netflix

Netflix gained only 2.2 million paying consumers in the 3 months to 30 September, as per its latest figures, as the increase in demand for its services sparked by the disease outbreak faded. The final estimation that came in July showed a decrease of 5% of the company’s share.

Paolo Pescatore, analyst at PP Foresight, announced, “The pandemic streaming gathering has reached a conclusion.”

However, Netflix still tops the list in number of followers with the total of 200 million subscribers.

  1. The Old Guard, gained 78 million views and become the hit within four weeks of its launch

The Netflix original, The Old guard, within four weeks of its launch gained 78 million viewers thereby making it the quarter’s most successful title for the company.

Attracting 76 million, 75 million and 66 million individuals during the first four weeks following their launch, Enola Holmes, Project Power and The Kissing Booth 2 were also successful.

  1. Markets overseas are utterly vital for the business.

Netflix’s number of foreign subscribers has already surpassed those in the US, and growth abroad remains critical.

The fastest growth of subscribers occurred in its Asia Pacific area in the most recent period with 1 million new subscribers and nearly half sign-ups.

In Japan and South Korea, the company boasted that it is now reporting membership in a “double-digit” share of high speed internet-connected homes.

But in the US, the business still generates its highest profits per consumer, so stability in its domestic market is important, particularly as competitors like Disney and HBO expands.

Netflix sought to comfort investors and wrote regarding its quarterly update that “retention remains healthy and engagement per member household was up solidly” as compared to the former year.

  1. Presently the race is on for more content

There’s an ongoing competition to generate the content particularly during the pandemic when the production have mostly closed. However, Netflix addressed those concerns by stating that “good and careful progress” is happening in production.

Sophie Lund-Yates, the equity analyst of Hargreaves Lansdown stated, “Original content might keep customers, but it costs a pretty penny, and is downright ghoulish for the bottom line. If consumers are expected to burn through content at a faster rate, the cash flow hole will in theory get bigger.”

  1. The production slowdown has improved its revenues

The firm revealed a record $790 million in quarterly sales thereby crediting it to the unexpected strengthening of the euro against dollar.

And the company said, due to the temporary decline in production, its profitability have also increased.

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