Netflix Reports a Subscriber Bump as Disney Joins the Streaming Party

Reed Hastings, the chief executive of Netflix, said rivalries are nothing new.

“There’s lots of competitors throughout the world,” he said at the DealBook conference in November. Netflix had already been up against Amazon, Hulu and YouTube for the past decade, he noted, saying, “The four of us have been competing hard all this time, and now it’s like, ‘Wow, this internet thing really works.’”

He was playing down the arrival of the streaming service latecomers, a group that includes Apple TV Plus and Disney Plus, which joined the party in November, and HBO Max and Peacock, which are scheduled to arrive in the coming months.

To outside observers, Disney Plus looked like a threat to Netflix’s dominance. After all, The Walt Disney Company owned seven of the top 10 grossing films last year, and its streaming service costs half of the standard Netflix subscription.

Indeed, a day after Mr. Hastings spoke at the November conference, Disney Plus signed up 10 million customers. While it’s worth noting Verizon gave out free subscriptions to a large swath of its customers as part of an agreement between the two companies, it was still an impressive figure that had industry insiders wondering how much Disney might have dinged Netflix.

Turns out, a little bit.

The streaming giant signed up 420,000 new customers in the United States during the last three months of 2019. That’s less than the 600,000 it had estimated. Netflix misses its estimates about half the time, but the company suggested that Disney Plus, which debuted Nov. 12, may have had a moderate impact in the quarter. Netflix now has 61 million customers across the country.

Still, Mr. Hastings expected big things from the entertainment colossus. “Disney’s an amazing company — I think they’re going to have great success,” he said at the November conference. Later, he added: “There’s a bunch of tech companies that are in entertainment, but I think Disney is the one we have the most to learn from in terms of entertainment.”

But the more important reality is that Netflix is largely an international business, and its slowing growth in the United States is nothing new. (The service still dominates the nation in streaming and expects to potentially top out at 90 million total domestic customers.)

That’s why, despite the pending arrival of domestic entrants like NBCUniversal’s Peacock (April) and AT&T’s HBO Max (May), Netflix’s bigger focus has been on its international growth. About 90 percent of its new business comes from outside the United States, and Mr. Hastings spends more of his time managing its overseas strategy than on domestic content.

Netflix added about 8.4 million subscribers overseas in the last quarter, exceeding the 7 million it had anticipated. The company had 161.7 million total subscribers around the world at the end of 2019, a 5.5 percent bump from the end of September. The company, which is much more of an international business, saw record additions in Latin America, Asia and Europe.