Netflix saw tremendous growth in terms of subscribers in 2020, apparently due to people’s need to be entertained at home. People expect many of them to cancel their subscriptions with reopenings of entertainment venues this year, although there are some facts that suggest the opposite. Let’s have a look at them.
As we said, many new subscribers are most probably the result of the pandemic which kind of forced people to stay at home, rendering them desperate for a source of joy. Locked at home, more and more people started to make use of online entertainment services, Netflix being one of them. Steam also had a surge in concurrent gamers, for which the record is still being continuously broken by the gaming platform’s players.
People, mainly investors, expect the new subscribers to cancel their Netflix this year, as they will not supposedly need this entertainment anymore. But some facts put forward by The Motley Fool does not indicate so.
New subscribers’ behavior patterns
As much as they’re new on the streaming service, the new subscribers act just like the old ones. There are not any drastic changes in the general subscriber profile. According to COO Greg Peters, the new subscribers are “behaving very much like the cohort of users” that they added before the pandemic.
With this being the case, the management does not need to do anything extra to keep them on the service. They just need to do what they were doing for the old subscribers, which is keeping them entertained and giving them their money’s worth.
Management foresees success
Netflix prices were increased in US, UK, and Canada last year, which indicates that the management is hopeful for the future. They would not have approved such price hikes if they were not confident that the streaming service would still be popular.
Netflix’s management expects six million new subscribers in Q1 2021 though, which is less than the 9.6 million in 2019 and 8.3 million 2018.