Popular media streaming application Netflix ended 2020 with more than 200 million subscribers, a milestone that was powered by the masses stuck at home amidst the pandemic. The company faced more competition than usual throughout the year. However, instead of flagging in the unprecedented times, it emerged more successful than ever.
In a recent statement, the company revealed that it is able to generate more cash than it needs. Hence, it will no longer need to borrow money to fuel its growth strategy. Moreover, Netflix’s shares were up 12% in after-hours trading.
Lockdowns around the world due to the ongoing pandemic significantly boosted streaming sign-ups across the board, and Netflix benefitted from the industry’s overall boom, adding more than 36 million subscribers during the year. Even though most of the new subscribers came during the first half of 2020 as the pandemic started, the fourth quarter saw an addition of 8.51 million subscribers. This was much more than what Wall Street investors were expecting. Around 83 percent of the new subscribers are from outside the U.S. and Canada.
Even though Netflix dominated 2020, investors have started to question just how long its dominance can last. The company has a lot of competitors in the market now including Amazon’s Prime Video, Disney Co.’s Disney+, Apple Inc.’s Apple TV+, AT&T Inc.’s HBO Max, and Comcast Corp. Most of these services are offering originals and classic hits. Netflix on the other hand has all but exhausted its potential market in the U.S. where it recently increased its prices and turned its attention to other parts of the world.
