If your brain is fried from having to pick stuff to watch on Netflix in your never-ending work-from-home experience, the company has proposed a solution: just let them decide.
In its fourth-quarter shareholder letter, Neflix this afternoon called attention to a feature that has been in development that it says “gives members the ability to choose to instantly watch a title chosen just for them versus browse.”
Said Netflix, “the response has been positive and we plan to roll it out globally in the first half of 2021.”
During a conference call with Neflix management, CEO Reed Hastings joked with his staff that the company should perhaps call the function “I’m feeling lucky.”
The choice of accepting a suggestion is one of multiple user interface enhancements the company has been tweaking in recent months. In October, Netflix added a tab to the user interface named “New & Popular.” That tab includes a feature called “Worth the Wait,” which will tell viewers things that are on the way, including shows that may not be out for as long as a year, as a form of reminder to users.
The user interface enhancements come amidst a banner year for the company, with paid additions to its streaming service, net of defections, of 37 million, a 38% increase over 2019. In fact, fourth-quarter paid net additions were 8.51 million, which was 2.5 million more than the company forecast and Wall Street was estimating.
The company said it is “becoming an increasingly global service,” as 83% of those additions came from outside the U.S. and Canada.
Netflix stock surged almost 13% in late trading to $565.50.
HP highlighted content that was strong in the quarter. It included the fourth season of the scripted drama The Crown, which Netflix said was more widely viewed than any of the previous three seasons. The company also mentioned Bridgerton, a drama produced by Shonda Rhimes that debuted in December and that Neflix said “has proven immensely popular.”
The company called attention to The Midnight Sky, a film directed by George Clooney and starring George Clooney, which it said was its largest original film, and which it expected 72 million households had watched in the first four weeks the film was shown.
Netflix’s revenue in the quarter rose 21.5%, year over year, to $6.64 billion, topping expectations for $6.62 billion. Earnings per share came in at $1.19 per share, below consensus for $1.39 per share.
For the current quarter, the company sees revenue of approximately $7.13 billion and EPS of $2.97, both above consensus for $7.03 billion and $2.15 per share.
The company expects to generate about 6 million paid additions this quarter, fewer than the 8.5 million additions Wall Street has been modeling.
More important to investors, the company has made dramatic progress in generating an actual cash profit from the business. A year ago Netflix lost $1.7 billion, but this past quarter it only lost $284 million.
Said Netflix, “We believe we are very close to being sustainably FCF positive,” projecting a breakeven year from a cash flow standpoint, versus a prior forecast of losing $1 billion.
Said Netflix, with its $8.2 billion in cash on hand, “we believe we no longer have a need to raise external financing for our day-to-day operations.”
