The company said that average paid streaming memberships climbed 23 percent year over year in Q4, although average revenue per membership was flat. It anticipates paid net adds of 6 million for Q1 2021 compared to 15.8 million in Q1 2020, which included the effect of the first pandemic lockdowns.
In terms of competition, Netflix said there are many choices, such as video gaming, linear television and content made by users on TikTok and YouTube. However, the company vowed to “work hard to grow our small share of screen time against these major competitors.” Netflix also noted that Discovery recently rolled out its streaming offering, while Disney+ is growing in new nations and with more content.
While Netflix acknowledged that Disney+ experienced a “massive first year,” the company said it recorded its largest year of paid membership expansion in its existence. Netflix said it added 37 million paid memberships for the full year.
“Our strategy is simple: If we can continue to improve Netflix every day to better delight our members, we can be their first choice for streaming entertainment,” the company said in a letter to shareholders. “This past year is a testament to this approach.”
All in, Netflix reported $1.19 in diluted earnings per share (EPS) on $6.64 billion in revenue for Q4. The company’s bottom line fell short of analyst estimates of $1.39 EPS, but its revenues were nearly in line with the $6.63 billion forecasted by analysts.
Shares of Netflix closed up a modest 0.76 percent Tuesday, but the company’s stock jumped by roughly 13 percent in after-hours trading as of about 5:15 p.m. Eastern time.