Netflix executives identified an unlikely competitor in their fight to attract new viewers to their broadcast platform when they reported on fourth-quarter earnings on Thursday.
The transmission giant said it earns an estimated 10 percent of all television screen time among consumers in the United States, or approximately 100 million hours per day of a possible one billion hours. According to this metric, Fortnite, the immensely popular video game created by Epic Games, is a tougher challenge than competitors in traditional media, Netflix executives said in a letter to the shareholder.
"We gained screen time for the consumer, both mobile and on television, away from a very broad set of competitors," the letter says. "We compete with (and lose) with Fortnite more than with HBO."
Netflix said it had a base of approximately 139 million members paid worldwide until the end of 2018. By comparison, Epic Games said Fortnite had approximately 200 million registered users last November.
Shares of Netflix fell about 3 percent on Friday as Wall Street reacted to a mixed earnings report. The company exceeded the expectations of net additions of subscribers and earnings per share, but its shares fell after hours due to concerns related to a bit shorter in fourth-quarter revenue and the burning of cash.
A first quarter revenue forecast of $ 4.49 billion was also below Wall Street expectations.
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Netflix has emphasized the original content in its bid to attract subscribers and differentiate itself from its competitors. While the free cash flow was negative at $ 1.3 billion in the fourth quarter, there are indications that the strategy is paying off. More than 80 million American households have seen Netflix's original "Bird Box" in the four weeks after it was launched, the company said.