Netflix Posts $16B Revenues For 2018, Records Subscriber Growth
- by Wayne Friedman , January 17, 2019
In the fourth quarter, Netflix posted $4.19 billion in revenue -- up 27.4% from the same period the year before. For the year, annual revenue was up 35% to $16 billion in 2018, and the service nearly doubled its operating profits to $1.6 billion.
The SVOD service says global streaming paid members for the period were up 26% to 139.3 million, adding 8.84 million -- 1.5 million in the U.S. and 7.3 million internationally.
Previously, Netflix said it had 57.4 million U.S. subscribers and 72.7 million international subscribers.
Overall results seem a bit underwhelming for some analysts. After market trading, Netflix stock was down around 3% to 4% to $343.01.
It offered guidance that first-quarter 2019 revenues will rise 21.4% to $4.5 billion, with global paid subscribers adding 8.9 million.
Against the backdrop of growing Netflix subscribers -- up 26% in the fourth quarter and 27% more revenues versus the same period a year ago -- the SVOD service also says it grabs a large share of U.S. TV "screen time" at about 10%.advertisement
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Among its fourth-quarter results, Netflix says it delivers “about 100 million hours a day to television screens in the U.S.” Netflix's estimate comes from overall U.S. television screen time of about 1 billion hours daily -- 120 million homes, times two TV sets, times four hours a day, which include out-of-home screens, such as hotels and bars.
When it comes to competition, Netflix isn’t all that concerned with similar movie/TV generated services:
“We compete with -- and lose to -- [video game] 'Fortnite' more than HBO. When YouTube went down globally for a few minutes in October, our viewing and signups spiked for that time. Hulu is small compared to YouTube for viewing time.”
It adds that its “focus is not on Disney+, Amazon or others, but on how we can improve our experience for our members.”
Recently, it disclosed that it would raise consumer monthly pricing 12% to 18% -- depending on the Netflix streaming service -- all to push more original content. Some estimates have projected that Netflix could spend upwards of $12 billion this year.
Netflix's calculations of its share of screen time are interesting. It's own usage claim works out to about 1.8 hours of screen time per day per home, which is consistent with what it has been saying for some time. In terms of an average resident in a Netflix subscriber home 1.8 hours of screen time per day probably translates to about 50-54 minutes of viewing time per person if we assume that a large part of the set usage involves only one viewer---as is the case with most TV screens---- and they behave like normal TV viewers, taking a break from time to time to go to the bathroom, using another screen to text, tweet, etc.
As for the total screen time figure, here, too, the we are dealing with assumptions, not actual data. One hundred twenty million homes x two sets per home x four hours per set seems to produce a number that is about right for "linear TV" --about 8 hours of set usage per home per day. But what about digital video? Doesn't it count as "TV"? And how were "connected TV" as well as non-Netflix streaming and videogame usage dealt with?
Hopefully, Nielsen will take note of Netflix's claims and come up with a tally that gives us an idea of what its panel survey findings have to say about Netflix's share of screen time calculations. Ideally, Nielsen might do its study on a viewer as well as a household basis and, maybe toss in some demographic info, as well as time of day breakdowns to give us a more detailed picture. How about it, Nielsen? Inquiring minds want to know.