Although Netflix benefited from sharply higher first-quarter subscriber growth, paid marketing costs in the first quarter were down substantially from the previous period -- and from a year ago.
Marketing expenses were $503.8 million for the first quarter -- down 18% from the March 2019 total of $616.6 million and 42% lower from the fourth quarter of 2019, at $878.9 million.
First-quarter revenues grew 28% to $5.8 billion, as net income virtually doubled -- to $709.1 million from $344.1 million in March 2019.
Worldwide subscribers increased by 15.8 million to total 182.9 million, double the global expected total of 8.2 million subscriber growth. Netflix 182.9 million global subscribers is up 23% versus a year ago.
In the U.S. and Canada, subscribers were up 2.3 million in the period (versus 550,000 gain in the fourth quarter of 2019 and the 1.9 million addition in the first quarter of 2019) to 69.97 million.
Netflix was cautious about its outlook.
“Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth,” says Netflix in its earnings release. “We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.”
In addition, Netflix faces growing competition from even more premium video streaming services to launch including WarnerMedia’s HBO Max to launch May 27 and NBCU’s Peacock, which will start in mid-July.