Netflix Banking on Better Content after Missing the Membership Mark in UCAN
While Netflix missed its fourth-quarter 2019 membership growth forecast in the United States and Canada (UCAN), the streaming giant is banking on the best practice that made it a household name in the first place — excellent content — to continue to grow its subscriber base in the next quarter and beyond.
For the record, Netflix added 550,000 subscribers in the UCAN region, but that was below the consensus of 600,000 set by Factset, a global provider of integrated financial information and analytical applications.
Netflix’s top shows over the years since its founding in 1997 include “Breaking Bad” and “Stranger Things,” two series that have received rave reviews for content.
In a shareholder letter released Jan. 21, Netflix attributed its low-membership growth in North America to increased competition and its price changes in the United States.
“Many media companies and tech giants are launching streaming services, reinforcing the major trend of the transition from linear to streaming entertainment,” the company wrote. “We have a big head start in streaming and will work to build on that by focusing on the same thing we have focused on for the past 22 years — pleasing members. We believe if we do that well, Netflix will continue to prosper.”
Netflix is seeing an increase in viewing per membership both globally and in the United States despite the debut of Disney+ and Apple TV+ in fourth-quarter 2019. The company said new content like The Witcher, which itlaunched on Netflix in December and is tracking to be its biggest season one TV series ever, and returning favorites like The Crown drive increased viewership.
“Great content grows engagement among our members, which we believe drives word of mouth, improves retention and grows paid memberships,” Netflix said.