Over 2018, Netflix made preparations to strengthen its business against forthcoming competitor activity in 2019 and beyond, which include:
- Disney’s planned commercial launch of its streaming service in 2019.
- AT&T’s intentions to showcase popular HBO content, given that the former has completed its acquisition of Time Warner in June 2018 for $85 billion; the acquisition has been made with the intention of rivalling Netflix by streaming popular TV content, including HBO Now, HBO Go, DIRECTV Now and Cinemax.
- NBC Universal’s aims to ‘offer a variety of choices’ in terms of streamed content, given its ‘deep relationships with advertisers and distribution partners’ according to Steven Burke, CEO of NBC Universal.
Netflix continued its efforts throughout 2018 to expand globally, such as enhancing the quality of its content offerings in local languages, such as Hindi in India, to ‘stimulate subscriber growth.’ Despite this strategy, Netlix explains that it is investing in its ability to ‘strengthen local production capacity’ and ‘offer a wide breadth of programming… to maximise the very diverse tastes’ of its users. Netflix aims to add 100 million subcribers in India alone, in addition to expanding its international originals in countries such as Mexico, Spain, Italy, Germany, Brazil, France, Turkey and throughout the Middle East, to just name a few. Already, Netflix has had strong viewership for originals such as Sacred Games and Goul in India, and La Casa De Las Flores in Mexico.
In Europe, meanwhile, the EU (European Union) is rewriting its audio-visual framework, which may involve subscription streaming services dedicating a minimum of 30% of their content offerings to European works. In addition, some member states want to require players, such as Netflix, to invest a proportion of locally generated revenues in European production and works, which Netflix states that it is able to meet.
Netflix has also entered into partnerships with Pay-TV providers, ISPs and mobile operators across the world to increase its subscription base and viewership. In Q3 2018, Netflix rolled out the first mobile bundle in Japan with KDDI and expanded its partnership with Verizon to pre-install the Netflix app on Android phones. The following quarter, it also announced its partnership with Sky UK.
In Q4 2018, Netflix added 8.8 million paid subscribers, including 7.3 million domestic additions, bringing total global streaming paid memberships to 139 million in over 190 markets. It foresees global streaming paid net additions of 8.9 million in the first quarter of 2019. In Q4 2018, Netflix’s revenues reached $4.2 billion, up from $2.9 billion; its full year 2018 revenue was $15.4 billion.