Netflix Q1 2020 Earnings Report — Unpacking The Numbers!

  • Q1 Global paid subscribers added — 15.77M (vs 7M expected)
  • Q1 Revenue — $5.7B (vs $5.7B expected)
  • Q2 Global subscriber forecast — 7.5M
  • Q2 Revenue forecast — $6B
  1. No change in revenue even with a 2 fold increase in subscriber numbers?
  • Strengthening US Dollar vs Weakening Foreign Currencies

Since the COVID-19 crisis began, the value of the US dollar index rose to near record highs. The greenback has levelled off a bit, but has maintained an edge relative to most major currencies, including the euro, China’s yuan and the Japanese yen.

  • $150M COVID-19 Film & TV Emergency Fund
  • March 8: 3%
  • March 15: 39%
  • March 22: 123%
  • March 29: 123%
  • April 5: 115%
  • A 2018 PwC survey said 3 out of 4 people bought Prime for its delivery promises and not for its content offering. And over 50% said that they’re likely to switch to other brands if Amazon does not fulfil its delivery promises.
  • Subscription revenue of Prime in Q1 2020 rose by only 28%, which was the 2nd slowest among Amazon’s 6 revenue streams — Online Stores, Physical Stores, Retail, Subscription, AWS & Others.
  • There’s a growing trend of “Amazon Prime refund” & “Amazon Prime cancel” in US in last 90 days. This is due to the most obvious reason of people not getting their orders fulfilled on time and Amazon not yet having a policy of cancellation or extension of its Prime membership.
  • Disney+ reported 50M paid subscribers in April which also counts 8M of HotStar. But HotStar has never disclosed its premium subscriber numbers publicly. And this 8M not just includes its VIP members (the subscription costs for which is substantially lower and which offers varying degrees of Disney+ content) but must also be counting old customers acquired before Disney came into the picture with HotStar (Disney+ hasn’t clarified how it’s counting paid subscribers). And it doesn’t take someone the brain of Elon Musk to figure out which subscription tier will be having more users in India.
  • Out of this 50M again, a further 7–8M came from Verizon media. So?
    Well, Disney+ has a deal in place with Verizon media where Verizon’s customers are offered Disney+ bundled into their Verizon access, which effectively means, FREE OF COST!

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