Netflix to Reach 100 Million Subscribers

Apr 21, 2017, 16:48
Netflix to Reach 100 Million Subscribers

However, Netflix did provide upbeat guidance for second quarter subscriber additions at 3.2 million, well above the 2.54 million subscribers analysts were expecting.

Netflix has expanded around the world over the last few years, betting that its US formula would pay off in other countries.

Netflix reported slower growth than analysts were predicting in the first quarter - held back by a dearth of big releases like "House of Cards" that generate fresh subscriber signups both in the United States and overseas.

Netflix revealled it will spend more than US$1 billion in marketing its content this year as its slate of originals continues to expand, and will up its investment in programmatic advertising. That proved to be a huge success for Netflix when they entered the global market and it looks like Amazon is right on their heels.

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The one blemish in the first quarter for the Reed Hastings-led company was that is fell short of forecasts for subscribers growth - although the 4.95 million new subs left it just shy of the 100-million subscriber level. As for the competition, Netflix isn't phased by the advent of virtual MVPDs such as Sling, PlayStation Vue, DirecTV Now, YouTube TV, and Hulu's forthcoming service.

Wall Street was expecting 5.27 million new subscribers. Analysts are forecasting net income of $US477.2 million, or $US1.09 a share, on revenue of $US11.2 billion, based on the average of estimates compiled by Bloomberg. "Our focus also is on on-demand, commercial free viewing rather than live, ad-supported programming".

The company blamed the 22% year-over-year decline in worldwide subscribers to an unusually large global growth last year.

"We've said previously subsequent seasons of show that are very popular tend to have more impact on the business than introducing brand new IP [intellectual property]", explained Netflix Chief Content Officer Ted Sarandos during the webcast. The Internet television network reported $0.40 earnings per share (EPS) for the quarter, beating the Thomson Reuters' consensus estimate of $0.37 by $0.03. Revenue, however, did fall, but Netflix executives said it was an expected drop because operating costs had increased this year. It plans to invest $6 billion in content this year, more than major competitors, including Amazon and CBS.