Netflix subscriber growth soars past 200 million members

Netflix's milestone cements its dominance, reinforced by the pandemic, after more than a decade of preparation for a streaming-first world.

Joan E. Solsman Former Senior Reporter
Joan E. Solsman was CNET's senior media reporter, covering the intersection of entertainment and technology. She's reported from locations spanning from Disneyland to Serbian refugee camps, and she previously wrote for Dow Jones Newswires and The Wall Street Journal. She bikes to get almost everywhere and has been doored only once.
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Joan E. Solsman
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Scene from Cobra Kai

Cobra Kai, a series that started out as a YouTube exclusive original, has seen its popularity explode since Netflix licensed it and released a new third season.  


Netflix's subscribers surpassed 200 million as the company closed out 2020, a milestone further cementing Netflix as the world's biggest subscription streaming video service of its kind. 

By comparison, Disney Plus -- which has been the breakout hit in the so-called streaming wars, when a parade of new Netflix rivals launched -- ramped up to 86.8 million subscribers in its first year. Disney's Hulu service, which has been streaming as long as Netflix but operates only in the US, has 38.8 million subscribers. HBO Max has only 12.6 million active accounts. 

On Tuesday, Netflix said subscribers increased by 8.51 million between October and December to hit 203.66 million total, according to its Tuesday report on fourth-quarter results. That beats Netflix's October guidance to add 6 million new members. Analysts on average expected about 6.1 million member additions, according to Thomson Reuters. 

Investors were flocking to Netflix stock because of the unexpectedly strong growth, as well as news that Netflix financials are solid enough that the company will consider share buybacks and will stop borrowing money to fund its day-to-day operations. Shares jumped 14% percent to $571.18 in recent trading Wednesday.

Though Netflix's growth slowed to a crawl in the previous quarter, the latest results cap a year of soaring popularity for Netflix, as many households came to grips with entertaining themselves more at home. Netflix added more new subscribers in the first three months of the year, for example, than it ever had before, record growth that was taken as a bellwether for the popularity of streaming video during the coronavirus pandemic. With the eye-popping size of its original-programming pipeline and its stream-at-home model, Netflix was ideally positioned to keep serving up new shows and movies to people stuck at home and desperate for entertainment. 

But even Netflix warned that its popularity early in the year was likely pulling forward demand that it would have typically expected to materialize later. 

Still, Netflix had already shown signs that its growth was chugging along during the latest period. In October, it ended its long-standing practice of offering month-long free trials to new subscribers. And later that month, Netflix raised prices in the US for both its most popular, standard plan and its higher-end premium plan. The price bump, likely unwelcome by some subscribers, was widely anticipated by investors and analysts to come sometime in 2020 or possibly 2021. But the fact that it came earlier rather than later suggested Netflix was confident enough in its growth trends to start charging members more in spite of a myriad of new rivals. 

"It is still striking to see how the COVID-19 pandemic has been nothing but a major boon to the company's operations," MoffettNathanson analyst Michael Nathanson said in a note about the results. "As much of the world is still shuttered in their homes with nowhere to go and nothing to spend their money on, consumer adoption of streaming services has been accelerated by years.... While the pandemic clearly worked to Netflix's advantage, the company had been preparing for a streaming-first world for more than a decade now."

Lupin's surprise hit

Netflix's unprecedented worldwide scale is widening the audience for programming that, conventionally, would never be considered sure-fire hits. For example, Netflix's latest hit show is Lupin, a French-language heist series pulling in audience numbers unseen for a Netflix original show since The Witcher in December 2019. Netflix said Tuesday that it projects Lupin will be watched by more than 70 million accounts within its first four weeks of release. The Witcher -- Netflix's most-watched original series since the company started reporting these stats -- hit 76 million accounts.

But Lupin's appeal is crossing language barriers, seemingly making it the most popular non-English-language titles on Netflix yet. Previously, La Casa de Papel -- a Spanish-language crime thriller titled Money Heist for English-speaking audiences -- had reigned as Netflix's biggest non-English-language show. But La Casa de Papel's third season was watched by roughly 65 million accounts, compared with Lupin's projected 70 million. 

Lupin has hit No. 2 on the company's US popularity charts, Netflix said, and it has ranked No. 1 in dozens of other countries including Brazil, Argentina, Germany, Italy, Spain, Poland, Vietnam and the Philippines (and, presumably, France too). 

Ted Sarandos, Netflix's co-CEO and the company's head of content, said that Netflix's all-you-can-eat subscription model lowers the risks for members "to be much more adventurous about what they watch." Subscribers may hear about a popular show like Lupin, already included in their subscriptions, and give it a shot despite previous hesitancy about foreign-language programming. 

"They push play, and 10 minutes later, all of a sudden, they like foreign-language television. So it's a really incredible evolution," he said Tuesday evening during a call to discuss results. "You can throw out a lot of preconceived notions about what works and what doesn't, because those are mostly established by business trends, not by consumer trends."

Netflix performance by the numbers

In the US and Canada, its biggest single region, Netflix added 860,000 new streaming customers, for a total of 73.9 million. In Europe, Middle East and Africa, subscribers grew by 4.46 million to 66.7 million. In Latin America, subscribers increased 1.2 million to 37.54 million. And in the Asia Pacific region, Netflix booked 2 million new members to hit 25.5 million.

Looking ahead to the first quarter, Netflix expects to add 6 million streaming members globally. Analysts' consensus estimate was for Netflix to predict about 8 million. Netflix also predicted $2.97 per share in earnings in the first quarter. On average, Wall Street analysts who track Netflix expected $2.07.

Overall in the fourth quarter, Netflix reported a profit of $542.2 million, or $1.19 a share, compared with $587 million, or $1.30 a share, a year earlier. Revenue climbed 22% to $6.64 billion.

Analysts on average expected per-share profit of $1.39 -- compared with Netflix's guidance for $1.35 -- and $6.1 billion in revenue.

Watch this: David Katzmaier's tips for upgrading your home entertainment during COVID-19