In the wake of plans to raise prices across the board in the US, Netflix said it added a record 8.84 million paid streaming subscribers – 1.5 million in the US and 7.3 million internationally — in Q4 2018, pushing its global total past 139 million.
Q4 subscriber results, which were up 25.9% year-on-year, beat Netflix Inc. guidance that it would add 7.6 million paid subs in the period. The company expects to add 8.9 million subs in Q1 2019 and end the period with 148.16 million.
Netflix said Q4 revenues were $4.19 billion, short of the $4.21 billion that Wall Street expected. Netflix shares were down $11.19 (3.17%) to $342.05 in after-hours trading.
Netflix said it expects its new, higher pricing in the US — for new members today and to be phased in for existing members over Q1 and Q2 2019 — will lift its average selling price numbers, which rose 3% in Q4. Netflix increased pricing in Canada and Argentina in Q4 2018, and in Japan in Q3 2018.
“We are ready to pay top-of-market prices for second-run content when the studios, networks and producers are willing to sell, but we are also prepared to keep our members ecstatic with our original content if others choose to retain their content for their own services,” Netflix said in its Q4 investor letter.
Netflix also took some swipes at its competition. “We compete with (and lose to) Fortnite more than HBO,” the company said. “Our focus is not on Disney+, Amazon or others, but on how we can improve our experience for our members.”
Netflix finished the year with $3.8 billion of cash and said its $500 million unsecured credit facility remains undrawn. In Q4 2018, it had $19.3 billion in streaming content obligations.
