In which Netflix reveals its how it's holding up against Disney, its biggest hits, its surprisingly strong business in (yes) DVDs, gives its latest thinking on ads and provides some hard lessons for TVNZ, Sky and Spark.
Here are five takeaways from the streaming giant's fourth-quarter result.
1. So far, it's standing up to Disney and Apple
Netflix shares rose 4.41 per cent today (for a market cap of US$1.49 billion) after the streaming giant seemed to weather its first three months of competition from newcomers Disney+ and Apple+ just fine.
In numbers reported after the market closed yesterday, Netflix said it added a net 8.8 million paying customers in the three months to December 31, compared with forecasts of 7.7m, for a new high of 167m worldwide
Disney said it had signed five million subs to Disney+ in the new service's first 10 days, but then said it would not give more numbers until its next financial results.
It is early days, but at this point it's looking like Disney+ will have more of an impact on traditional pay-TV providers like Sky, who have lost their Disney channels as the Magic Kingdom makes Disney+ the exclusive home for all of its content outside theatres.
Some analysts did note, darkly, that Netflix is projecting a gain of 7m paid subscribers worldwide in the first quarter, short of its earlier 7.8m estimate. And more competition, such as HBO Max, is launching soon. But I've got a sneaking suspicion that there's a bit of low-balling going on.
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2. Its biggest hits revealed
There are no official ratings for streamers. Some companies, like Parrot Analytics, measure online chatter about shows, but we're largely in the dark beyond what Netflix and co chose to share - such as last October when it said some 64m Netflix households had watched season 3 of Stranger Things during its first four weeks.
With its fourth quarter report, Netflix trickled out a few more numbers.
One surprise is that it says The Witcher was watched by 76m Netflix households during its first four weeks. Many critics said this attempt to create a Game of Thrones-style fantasy franchise, was a bit by-the-numbers, but Netflix's market filing says otherwise (unknown is how many of those 76m stuck it out; I never made it to episode 2).
Netflix also gave numbers for The Crown, which it said was streamed by 73m, and that its action movie 6 Underground, directed by Michael Bay, drew 84m (such is the blizzard of content on Netflix that as a subscriber and frequent watcher, I hadn't ever come across it).
All we learned about other shows like Sex Education, Altered Carbon and Messiah (which is brilliant, by the way) is that they have "great content engagement", whatever that means.
3. DVDs: still a thing
Netflix began life as a company that let you rent DVDs online, then get them ordered by snail mail (a la Fatso here). This legacy business is in decline, but still makes a tidy profit contribution.
In the fourth quarter, Netflix had 2.2m subscribers to its US-only DVD service. For the year, DVDs generated US$297m profit and a profit contribution of US$123m.
It helps of course that bricks-and-mortar competition has dried up. As the Herald reported last week, the pending closure of the Dargaville branch of Blockbuster will leave just one store in the franchise on the planet (in Bend, Oregon).
(On a side note, I have to admit, I have a soft-spot for discs, still. Broadband is now fast and stable, but still has a "windowing" issue that streaming services have for their licensed content - which sees a lot of series and movies disappear every month. A DVD or Blu-Ray is forever.)
4. Oceans and oceans of debt
While Netflix was in the black for the fourth quarter on an operational basis, and made a US1.8b profit for the full year on US$20.1b revenue - it also continued to spend a huge amount of money on original content (a necessary strategic change after content makers got wise to and started launching their own streaming services).
That, in turn, drove another huge increase in debt from the year-ago US$10.4b to US$14.8b on the back of negative free cash flow to the tune of US$3.3b.
Streaming continues to look like a financially cruel terrain as various players compete in a landgrab.
Disney, for example, lost US$500m on Hulu last year and some US$650m on ESPN+ (it owns majority stakes in both services).
And this year the Magic Kingdom will surely bleed a lot more red ink on streaming, given its killer offer for US customers, who get a bundle of Hulu (mainstream entertainment programming), ESPN+ (sports) and Disney+ for just US$12.99 a month.
And the landscape will probably on get crueller in the short-term as the likes of Amazon (with the increasingly sports-focused Prime Video), Facebook, Google and others expand their streaming efforts.
On the plus side, Netflix told investors it believed 2019 would prove its peak year of cashflow deficit.
All of which must have the likes of Sky, TVNZ and Spark scratching their heads. Is there a way to make money in streaming? In a few years' time, will there be any global entertainment content that's not streamed directly from content creator to consumer? (No.) Will they have to compete against the increasingly football- and tennis-crazed Amazon during the next major rounds of sports rights? (Yes.)
5. No ads. Still
It must be tempting for Netflix to consider running ads to its 167m subscribers.
But CEO Reed Hastings reiterated his no-advertising stance as his company's fourth-quarter results were released.
At various points, I've mentioned to Sky executives that they should dial back on ads, especially on niche channels, given they stick out so sorely on pay-TV now it competes with streamers, and account for such a relatively small portion of revenue (this year, Sky's total revenue was $795m, ad revenue $52m).
New-ish CEO Martin Stewart told me it was a small segment, but one with outside profit. I'd encourage him to look at the bigger picture, and how ads put off paying subs.