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Netflix adds 16 million global subscribers, showing it's essential in a pandemic

Movies as an escape from pandemic

Netflix picked up nearly 16 million global subscribers during the first three months of the year, helping cement its status as one of the world's most essential services in times of isolation or crisis.

The first quarter of the calendar spanned the beginning of stay-at-home orders in the U.S. and around the world, a response to the coronavirus pandemic that apparently led millions to latch onto Netflix for entertainment and comfort when most had nowhere to be but home.

Netflix more than doubled the quarterly growth it had predicted in January, well before the COVID-19 outbreak began to shut down many major economies. It was the biggest three-month gain in the 13-year history of Netflix's streaming service.

"We're acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption," Netflix said in a letter to shareholders.

The company's stock shot to new highs recently, in contrast with the decline in the broader market. Since the start of the year, Netflix's stock has risen 31%, while the S&P 500 has dropped 16%.

"Netflix is and will continue to be the media company least impacted by COVID-19. Their business is a near perfect fit to a population that is suddenly housebound," eMarketer forecasting analyst Eric Haggstrom said in a note. 

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The company is well-positioned to ride out the broader slowdown, he said, because "a significant chunk of consumer entertainment budgets have been opened up from the closures of movie theaters, sporting events, restaurants and bars."

The company closed March with nearly 183 million worldwide subscribers, a 23% increase from the same time last year. It earned $709 million in the first quarter, nearly tripling from last year. 

But Netflix warned investors the surge was time-limited, and it expected subscriber growth to drop back down to pre-quarantine levels once stay-at-home restrictions were loosened.

Competitor Disney+, which launched in November with a library stocked with children's favorites, has amassed 50 million subscribers so far.

Netflix also released viewer numbers for some of its shows. The docu-drama "Tiger King," which became a cultural touchstone when it was released in March, was watched by 64 million people. "Love is Blind" attracted 30 million viewers; "Spenser Confidential" had 85 million viewers and "Money Heist" is projected to attract 65 million.

Even though it faces plenty of competition, Netflix appears better positioned to take advantage of the surging demand for TV shows and movies largely because of its head start in video streaming. The company has built a deep catalog since moving into original programming seven years ago. That should feed viewer appetites even though the pandemic response has shut down production on many new shows.

"Since we have a large library with thousands of titles for viewing and very strong recommendations, our member satisfaction may be less impacted than our peers," Netflix boasted in its report.

— CBS News' Irina Ivanova contributed to this report.

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