I’m pleased to present the 498th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

On this week’s podcast, we do a deep dive into Netflix’s Q4 ’19 results (reported earlier this week), and what they imply for 2020. Colin mostly focuses his comments on the decelerating growth rate in international subscriber additions and the ARPU squeeze that’s coming this year.

My focus is on the all-important domestic or “UCAN” (U.S. + Canada) region. Based solely on Netflix’s prior results and its own Q1 ’20 global subscriber addition forecast of 7 million, I think there’s at least a 50-50 chance Netflix will lose subscribers in UCAN in Q1 ’20. Just two years ago, this would have been an unimaginable thing to say; remember in Q1 ’18 it gained 2.28 million U.S. subscribers and in Q1 ’19 it gained 1.74 million.

That’s all before talking about Q2 ’20 where it will almost certainly lose UCAN subscribers, at a multiple of the 130K it lost in Q2 ’19, given the new competitive landscape. Netflix really needs to launch a lower-priced ad-supported tier, but yet again Netflix management rejected the idea, this time for inexplicable reasons.

Add it all up and Netflix is in for a bumpy ride in 2020. Meanwhile, since announcing its results on Tuesday after the market’s close, Netflix stock is up over $30 (about 10%, or around $15 billion extra market capitalization), once again proving that speculators simply can’t quit the stock regardless of the company’s actual performance or prospects.
 
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