Netflix added 8.8 million subscribers in the last three months of 2018, up 33% year over year and beating its beginning-of-quarter expectation for 7.6 million paid net adds.
The streaming giant gained 29 million new paid subscribers in 2018, up from the 22 million it added in 2017. It ended the year with over 139 million subscribers.
The company reported fourth quarter revenue of $4.2 billion, up 27% from the same period in 2017, but slightly shy of analyst expectations. Annual revenue rose to $16 billion in 2018, a 35% increase from the year before.
The growth in subscriber numbers reflects the success of the company’s original programs.
The company spent about $8 billion to produce new content last year.
Netflix estimates it earns around 10% of television screen time in the United States.
Netflix provided investors a rare glimpse of audience viewing patterns. The company provided data and projections about viewership in the first four weeks of release of some of its most popular content:
- Bird Box, from director Susanne Bier, watched by over 80 million member households in its first four week.
- You, a thriller series, estimated to be watched by more than 40 million homes in its first 4 weeks on the platform.
- Sex Education, a British teen comedy-drama show, tracking to be a big hit (estimated over 40 million households watching the title within the first 4 weeks).
- Elite, a Spanish original, had over 20 million member households around the world watching the series in its first four weeks on service.
Netflix said its spending on content is likely to increase.
“Our multi-year plan is to keep significantly growing our content while increasing our revenue faster to expand our operating margins,” Netflix said in a shareholder letter.
The company just raised its US monthly subscription fee for the fourth time, showing confidence in its business model. The subscription fee rose by 13% and 18% depending on the plan.
For the first quarter of 2019, Netflix forecasts global paid net additions of 8.9 million, up 8% year over year, with 1.6 million in the US and 7.3 million internationally.
