Netflix Gains 16 Million New Subscribers In Q1 Due To Coronavirus Lockdown

Netflix is enjoying a boost in its number of subscribers due to the coronavirus lockdown.

People worldwide are forced to stay at home due to the COVID-19 pandemic. While many businesses are negatively affected by the lockdown, Netflix is one of the few that’s been enjoying a boost in its revenue in the past months.

The production company set a record for quarterly gains by making an additional 15.77 million paid streaming customers in the first quarter of 2020. The company announced that it has 182.9 million paid subscribers globally by the end of Q1. The company enjoyed a 22.8% increase compared to last year, Variety reported.

Initially, Netflix said that it was expecting seven million subscribers for the first quarter, but that was before the worldwide quarantine.

“[O]ur membership growth has temporarily accelerated due to home confinement,” Netflix said in its quarterly shareholder letter.

Despite the boost, there were still negative consequences. Due to the shutdown of some Hollywood productions, Netflix announced that “some cash spending on content will be delayed, improving our free cash flow, and some title releases will be delayed, typically by a quarter.”

Also, the streaming giant noted that the “sharply stronger U.S. dollar” depressed its international revenue and its customer-support operations have suffered significant disruption before it added 2,000 new remote agents.

For the second quarter, Netflix is hoping to secure 7.5 million new subscribers worldwide.

“Hopefully, progress against the virus will allow governments to lift the home confinement soon. As that happens, we expect viewing and growth to decline,” the company said.

On April 17, Netflix won the auction for Melissa McCarthy and Chris O’Dowd’s movie “The Starling.” It paid almost $20 million to get the dramedy flick that was directed by Ted Melfi and written by Matt Harris. “The Starling” also stars Kevin Kline and Timothy Olyphant.

While Netflix’s business enjoyed a significant growth during the lockdown, Disney has reportedly been losing $300,000 to $350,000 daily because a number of its productions were forced to halt and its upcoming movies were pushed back. It’s also unclear if the losses will be covered by insurance.

“If we are talking in terms of protecting lost revenue due to enforced shutdown or scale-down of operations, some property policies may offer limited amounts of coverage, although many have specific communicable diseases exclusions,” said attorney John Tomlinson, who specializes in insurance and risk management law.