Netflix has welcomed 16 million new subscribers from onset of coronavirus

While many other industries have suffered due to the onset of the coronavirus outbreak, streaming services like Netflix, Amazon, YouTube, and Disney+ have exploded with revenue in the past few months

By ZACHARY KEYSER
An illustration photo shows the logo of Netflix, the American provider of on-demand internet streaming media. (photo credit: REUTERS)
An illustration photo shows the logo of Netflix, the American provider of on-demand internet streaming media.
(photo credit: REUTERS)
Netflix has added nearly 16 million users to its subscriber base since the start of the coronavirus pandemic.
With billions of people following shelter-in-place orders worldwide, streaming service usage has skyrocketed in the past couple months. Netflix has benefited greatly from the sweeping lockdown protocols in its first fiscal quarter – catapulting past the initial forecast sent to their investors at the start of the year. The streaming service is projecting an additional 7.5 million subscribers in the second quarter.
“At Netflix, we’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption in the short to medium term. Like other home-entertainment services, we’re seeing temporarily higher viewing and increased membership growth,” Netflix wrote in a letter to its shareholders on Monday.
However, the streaming giant would like their investors to stay realistic for the long term, as they note that in the third and fourth quarters, subscriptions are projected to be "light" in comparison to the first two quarters - once lockdown orders are lifted and people can comfortably leave their homes again.
“We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon," Netflix added. "By helping people connect with stories they love, we are able to provide comfort and escape as well as a sense of community during this pandemic. So our focus has been on maintaining the quality of our service while our employees around the world adapt to working from home."
While many other industries have suffered due to the onset of the coronavirus outbreak, streaming services like Netflix, Amazon, YouTube and Disney+ have exploded with revenue in the past few months, with the latter gaining over 50 million subscribers in only five months - far surpassing initial predictions when the service was released late last year.
Netflix has recently captivated audiences sheltering in place with shows such as true-crime drama Tiger King and a new dating show called Too Hot To Handle. This show puts ten sexed-up strangers in a house together who believe they are there for a summer filled with fun, only to tell them they have to abstain from all sexual activity 12 hours into the retreat, with a prize of $100,000 on the line keeping them in check.  Too Hot To Handle has been the most popular show in Israel and worldwide since its introduction last week, and Tiger King took the world by storm in the first month of lockdown, becoming the biggest Netflix hit series since Stranger Things.
A new series about Michael Jordan's 1997-98 basketball season with the Chicago Bulls called The Last Dance has also been very popular since it dropped earlier this week.
Although Netflix is still churning out content, the pandemic has forced the halting of filmed productions worldwide, impeding Netflix's ability to produce new content for their binge-watching audience. It is important for the entertainment company to release new content and new shows for their users to choose from throughout the year in order to maintain their subscriber base, especially with users having the ability to watch a full Netflix series in a day – if they possess the stamina and dedication.
While this will definitely be a bridge for Netflix to cross in the future, as of last quarter the company added 2.3 million new customers from Canada to their subscriber base, as well as 7 million from Europe, the Middle East and Africa. And with production costs at an all time low, for the first time since 2014 Netflix has finally reached a "positive free cash flow," producing $162 million dollars in the first quarter, according to Bloomberg.

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"When it comes to production, almost all filming has now been stopped globally, with the exception of a few countries like Korea and Iceland. 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 told their shareholders.
"In our 20+ year history, we have never seen a future more uncertain or unsettling. The coronavirus has reached every corner of the world and, in the absence of a widespread treatment or vaccine, no one knows how or when this terrible crisis will end."


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