Netflix Reports a Subscriber Bump as Disney Poses a New Threat

Reed Hastings, the chief executive of Netflix, has grown used to going up against Amazon, Hulu and YouTube. But The Walt Disney Company’s entry into the streaming industry, with Disney Plus, caught his attention.

“There’s a bunch of tech companies that are in entertainment,” Mr. Hastings said at the DealBook conference in November, “but I think Disney is the one we have the most to learn from in terms of entertainment.”

Disney Plus started strong in November, signing up 10 million customers in its first day. Industry insiders wondered how much Disney might have dinged Netflix.

Turns out, a little bit.

Netflix signed up 420,000 new customers in the United States during the last three months of 2019, the company reported on Tuesday. That’s less than the 600,000 it had estimated.

Netflix misses its estimates about half the time, but the company suggested that Disney Plus may have had a moderate impact in the quarter. Netflix now has 61 million customers across the country.

Its slowing growth in the United States is nothing new. The service still dominates the nation in streaming and expects to top out at 90 million total domestic customers.

Internationally, the results were more impressive. Netflix added about 8.4 million subscribers outside the United States in the last quarter, exceeding the 7 million it had anticipated. The record additions in Latin America, Asia and Europe have given the company a total of 167.1 million subscribers around the world, a 5.5 percent bump from the end of September.

The new subscriptions abroad underscored that Netflix is largely an international business, putting it in a good position to counter the pending arrival of domestic streaming entrants like NBCUniversal’s Peacock (April) and AT&T’s HBO Max (May). About 90 percent of Netflix’s new business comes from outside the United States, and Mr. Hastings spends more of his time managing its overseas strategy than on domestic content.

In December, the streaming giant released for the first time detailed subscriber figures for its global business, including Europe, Latin America and Asia.

The company also reported a significant change in how it counts viewership. Netflix used to tally accounts that watched at least 70 percent of a show or film to generate its version of a ratings figure. Now, it will consider a “view” to be any account that has watched at least two minutes of a series or a film.

Some Hollywood players have expressed frustration with the meager viewership data provided by Netflix. Nielsen, a third-party research firm, provides ratings but only to clients, such as producers and studios.

On Tuesday, Netflix touted some of its new programming, including “The Witcher,” a fantasy epic starring Henry Cavill. The company said it had been viewed by 76 million households within four weeks of its release under the new measurement system.

The company anticipates adding 7 million total customers for the first three months of this year, down from the 9.6 million it added in the same period last year. That has partly to do with the competitive landscape and a price increase Netflix instituted last year.

“We have a big head start in streaming,” the company said in a statement, addressing its new rivals. “We believe if we do that well, Netflix will continue to prosper.”



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