Netflix on streaming rivals: ‘We compete with (and lose to) Fortnite more than HBO’

Netflix CEO Reed Hastings. (GeekWire Photo / Kevin Lisota)

Though Netflix is the name commonly associated with streaming video, it’s a huge market with countless players and new ones joining all the time. Netflix itself acknowledged the competitive landscape in its year-end earnings report Thursday, when the company disclosed a record number of new customer additions.

“There are thousands of competitors in this highly-fragmented market vying to entertain consumers and low barriers to entry for those with great experiences,” the company wrote in a letter to shareholders. “Our growth is based on how good our experience is compared to all the other screen time experiences from which consumers can choose.”

Netflix estimates that it captures about 10 percent of TV screen time in the U.S., and less than that on mobile devices and abroad. The company says it’s not just competing with Amazon Prime Video or traditional TV, it’s also battling other forms of on-screen entertainment.

“We compete with (and lose to) Fortnite more than HBO,” the company said in its letter.

Netflix’s earnings call is streaming online:

For the quarter, Netflix reported earnings per share of $0.30 on $4.19 billion in revenue, beating Wall Street expectations for revenue but falling short on profits. Netflix stock is down 3 percent in after-hours trading.

The company’s quarterly disclosure comes just a few days after the news of across the board price hikes for its various streaming plans. Netflix did acknowledge the changes, but didn’t go into details, saying the price hikes fit with the company’s plan “to keep significantly growing our content while increasing our revenue faster to expand our operating margins.”

In the fourth quarter, Netflix added 8.8 million paid members — 1.5 million in the U.S. and 7.3 million internationally — exceeding its own projections of 7.6 million. Netflix added 29 million subscribers in 2018 — a 33 percent increase over 2017 — to bring its total base to 139 million.

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