Netflix boosted by nine million new subscribers as revenue rises to £4.2bn

Netflix gained almost nine million new subscribers in its fourth quarter, boosted by releases including a new season of royal drama The Crown and two Oscar-nominated films.

The streaming website added 8.76 million paid global subscribers in the three months ending 31 December.

Net income rose to $587m (£449m) in the fourth quarter from $134m (£102m) a year earlier, while total revenue rose to $5.5bn (£4.2bn) from $4.2bn (£3.2bn) a year earlier.

The fourth quarter was the first to see Netflix up against streaming newcomers Walt Disney and Apple, both launched in November.

The company admitted this competition would continue to affect its US business, where subscriber growth of 420,000 was below expectations.

Around 10 million people signed up to the Disney streaming service on its first day and, while Apple's performance was less clear, HBO Max - from AT&T-owner WarnerMedia - will join the competition in May.

Netflix's availability in more than 190 countries gives it the largest global presence, but as more competitors enter the market and household entertainment budgets are stretched further, it is unlikely to be able to raise subscription prices as it did in the US last year.

As competitors set up their own streaming services they are also pulling their productions off Netflix. Friends, for example, left this month to be run on HBO Max. The Office is leaving at the end of this year to be played on NBC's new platform launching next year.

Netflix will increasingly have to look outside the US for growth. Its fastest-growing region is Asia-Pacific, prompting a heavier investment in non-English language content.

When asked about the possibility of introducing adverts, Netflix chief executive Reed Hastings noted that the digital advertising market is dominated by companies such as Google, Amazon and Facebook and concluded: "There is not easy money there".

Netflix does, however, have an advantage with years of data on what viewers like to watch.

EMarketer analyst Eric Haggstrom said: "Netflix's scale allows it to reach mass audiences, which makes it easier for them to create hits when compared to newcomers to the market."

Netflix expects to add 7 million subscribers globally during the first quarter of 2020 and said: "We have a big headstart in streaming and will work to build on that by focusing on the same thing we have focused on for the past 22 years - pleasing members."

Netflix shares were up just over 2% in after-hours trading.