Reed Hastings, the chief executive of Netflix, has grown used to going up against Amazon, Hulu and YouTube. But the Walt Disney Company’s entry into the streaming industry, with Disney Plus, caught his attention.
After Netflix released its earnings figures for the fourth quarter of 2019 on Tuesday, Mr. Hastings noted his new rival’s “great” content lineup, including “The Mandalorian,” a “Star Wars” series featuring the character known as Baby Yoda. And in a rare acknowledgment of a competitor’s strength, he added that the emergence of Disney in streaming “takes away a little from us.”
Disney Plus started strong in November, signing up 10 million customers on its first day, and industry insiders wondered how much Disney might have dinged Netflix.
Turns out, a little bit, according to Netflix’s latest results.
The streaming giant signed up 420,000 new customers in the United States during the last three months of 2019, the company reported. That fell shy of the 600,000 it had expected.
Netflix misses its estimates about half the time, but the company suggested that, for this quarter, Disney Plus might have had a moderate impact. But in Mr. Hastings’s view, Disney is more of a threat to traditional television. “Most of their growth in the future is coming out of linear TV,” he said in a call with investors after the earnings announcement.
Netflix now has 61 million customers across the country. Its slowing growth in the United States is nothing new. The service is still the dominant streaming company in the nation and expects to top out at 90 million total domestic customers.
Internationally, the results were more impressive. Netflix added about 8.4 million subscribers outside the United States in the last quarter, exceeding the seven million it had anticipated. Record additions in Latin America, Asia and Europe have given the company a total of 167.1 million subscribers around the world, a 5.5 percent bump from the end of September.
Netflix’s stock rose more than 2 percent in after-hours trading following its fourth-quarter earnings report.
The new subscriptions abroad underscored Netflix’s status as a largely international business, putting it in a good position to counter the pending arrival of domestic streaming entrants like NBCUniversal’s Peacock (April) and AT&T’s HBO Max (May). About 90 percent of Netflix’s new business comes from outside the United States, and Mr. Hastings spends more of his time managing its overseas strategy than on domestic content.
The company on Tuesday also reported a significant change in how it counts viewership. Netflix used to tally accounts that watched at least 70 percent of a show or film to generate its version of a ratings figure. Now, it will consider a “view” to be any account that has watched at least two minutes of a series or a film.
Some Hollywood players have expressed frustration with the meager viewership data provided by Netflix. Nielsen, a third-party research firm, provides ratings but only to clients, such as producers and studios.
In its latest report, Netflix played up some of its new programming, including “The Witcher,” a fantasy epic starring Henry Cavill. The company said it had been viewed by 76 million households within four weeks of its release under the new measurement system.
But the new system inflates viewership data by as much as 35 percent, according to the company. Netflix said the new method was fair because it treated short and long pieces of content equally. The new count reveals a viewer’s “requests,” the company said, akin to the “most popular” section of a news site.
Netflix anticipates adding seven million total customers for the first three months of 2020, down from the 9.6 million it added in the same period last year. That has partly to do with the competitive landscape and a price increase Netflix instituted last year.
The company’s balance sheet is also improving. For the current year Netflix anticipates it will have to spend $2.5 billion more in cash than it takes in — a financial metric known as cash flow — which would be an improvement over last year, when it burned through more than $3 billion.
Netflix has been investing more on its own shows and films instead of renting them from other studios. Over time, it could stockpile a higher proportion of content that doesn’t require licensing payments.
The company, based in Los Gatos, Calif., reported income of $587 million on $5.5 billion in sales. Investors were looking for $335 million in profit and $5.4 billion in revenue. For the current quarter ending in March, the company expects to add $760 million in profit with $5.7 billion in revenue.
“We keep doing these amazing numbers,” Mr. Hastings said on the call. “The quality of our service two or three years from now will be so much higher than it is today — that’s the thing that’s not well understood.”
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