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State of the Screens

Netflix Posts $16B Revenues For 2018

By January 30, 2019No Comments

Netflix beat analyst projections for subscription growth by 16%.

Subscriber growth in 2018-Q4:
1)
Projected — 7.6M
2)
Actual — 8.8M

Netflix subscribers (% of total):
1)
International — 80.8M (58%)
2) Domestic — 58.5M (42%)
3) Total — 139.3M

Total subscribers (YoY growth):
1)
2017-Q4–110.6M
2)
2018-Q4–139.3M (↑ 26%)

Flashback #1: Inside the Binge Factory

Netflix subscribers:
1) 2011–25M
2) 2018–139M
3) 2020P — 200M
4) 2030P — 360M

Wow: Netflix estimates that their programming accounts for 10% of total TV screen time in the U.S.

Netflix estimate on total daily TV time (% of total):
1) Total TV hours — 1B
2) Netflix TV hours — 100M (10%)

Quick math #1 on total TV time:
1)
TV households — ≈ 120M
2) TV sets/HH — 2
3)
Hours/day/TV set — 4
4)
Hours/day/HH — 8
5)
Total TV hours/day — ≈ 960M

Quick math #2 on Netflix TV time:
1)
U.S. subscribers — 58.5M
2) TV sets/HH — 2
3) Netflix TV hours/day — 100M
4) Hours/day/TV set — 0.85
5) Hours/day/subscriber — 1.70

Quote from Reed Hastings — CEO @ Netflix:
“That is why Disney — they have great content and we’re excited for their launch — maybe they grow over a couple of years to 50 million hours a day, but that’s out of the billion,”

Netflix content spend by year (YoY increase):
1) 2013 — $2B
2)
2014 — $3B (↑ 50%)
3) 2015 — $4B (↑ 33%)
4) 2016 — $5B (↑ 25%)
5) 2017 — $9B (↑ 80%)
6) 2018 — $12B (↑ 35%)
7) 2019P — $15B (↑ 25%)

Netflix free cash flow by year:
1) 2014 — -$53M
2) 2015 — -$841M
3) 2016 — -$1.58B
4) 2017 — -$1.96B
5) 2018 — -$2.85B
6) 2019 — -$2.85B

TBT: It was 10 years ago this month when Netflix first released streaming video!

Video: What to expect from Netflix Q4 earnings

Podcast: Netflix and Its New Challengers

More #1: Netflix Is Set to Post Big Q4 Earnings — Proof That Wall Street Gives It a Longer Leash

More #2: Netflix’s Simplicity Is Its Secret Weapon

More #3: Why Netflix is poised to survive the new ‘tv bubble’

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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