The quarterback season in the technology sector started a few days ago. Among them, Netflix stands out in excellent statistics. Particularly those related to subscribers, which have grown significantly due to incarceration. Netflix is worth checking out from there Apple is also competing in the same space, even though they both do it differently. Let's go with the math.
An unusual Netflix quarter
Netflix's results this quarter have been excellent. Not business statistics themselves, but rather growth in subscribers. But let's first look at the amount of revenue and its annual growth rate:
As the graph shows, Netflix's collections this quarter continue to grow. The company continues to earn more than the same period last year, though a downward trend can be seen in the last 8 seconds. Viewed like this, there is no trace of positive symptoms
Here is the growth of new paid subscribers in the four regions where Netflix divides its business: USA and Canada (UCAN); Europe, Middle East and Africa (EMEA); Latin America (LATAM); and Asia Pacific (APAC). In this graph we see a "sinkhole" in the growth of subscribersand produced last summer.
Traditionally, Q1 is a quarter of many highs due to the Christmas campaign. But in this case there is more is bigger than expected. His to be led In Q1 2020, Netflix expects 7 million new subscribers. The result has produced 15.8 million new subscribers, which is more than twice as expected.
Finally, we have to look at the regional revenue distribution. As can be seen, the USA and Canada are the most important markets, followed by EMEA, LATAM and APAC. But it is evolution It is very important for the last three years. UCAN loses the impact, above all, of EMEA and later of APAC. Latin America remains almost the same.
Imprisonment loves Netflix even though it may be "strange"
It is clear that incarceration is the cause of this surge in the number of subscribers. Many countries are starting to take steps to house arrest throughout the month of March, of course a significant increase in subscribers will be explained but not its impact on finances (subscriber numbers are calculated at the end). With the house closed, people have turned to Netflix for some time to pass.
It is highly likely that the coronavirus favors services such as Netflix, where the catalog is extensive. Apple TV + is too small, although Apple (and others) seized the opportunity to donate the part for free. The idea is to extend the trial period and be able to attract more subscribers.
The closure of a large part of the world by the end of Q1 has fueled a massive growth for Netflix subscribers.
Going back to Netflix, there it is two possible ways to increase subscribers:
- New subscribers who decide to sign up.
- There were no subscribers, but COVID-19 made them keep the app.
Contract registration occurs quarterly. Users, for whatever reason, decide to sign up. If the growth rate is maintained above this dressing, the result will be positiveo. And if the wear is too low, the growth will be much higher than usual.
We do not know exactly what happened (greater growth compared to decrease). But we can think of that incarceration played an important role when users have decided to keep Netflix. The last question we should ask ourselves is: what will happen to the subscribers once these forms of detention are proposed? Would we then see a higher value inactivity Or, on the contrary, will Netflix be able to retain these users?
Answers will be seen in the future, as long as the methods have been updated and companies report their results again.