Netflix subscriber surge of 5.3 million new users sends shares soaring
Netflix has surprised by declaring an unexpected surge in subscriber numbers, scotching fears that the streaming service may have hit a plateau.
Netflix subscriber surge sends shares soaring
The lead player in the fast-growing internet television sector extended its lead over the third quarter by racking up an additional 5.3 million subscribers globally, well in excess of Wall Street analysts’ predictions of 4.5 million and boding well for Netflix’s target of an additional 6.3 million subscribers in the current quarter.
Should those figures pan out, Netflix would weigh in at a healthy 115.6 million subscribers having already seen its share price surge to $205.07 – a rise of 64% this year.
The bumper stats vindicate Netflix’s original content first strategy which has seen it invest substantial sums in hit programmes such as House of Cards, Stranger Things and Orange is the New Black, something it will now double down on by ramping up its content budget still further from $7bn to $8bn in 2018.
In a quarterly shareholder update Netflix wrote: “As we move into 2018, we aim to achieve steady improvement in international profitability and a growing operating margin as our success in many large markets helps fund investments throughout Asia and the rest of the world.
“We have a good head start but our job is to improve Netflix as rapidly as possible.”
Of Netflix’s 5.3 million newest subscribers 4.45 million hail from international markets while 850,000 originate from the US, fueling a 30% revenue increase to $2.99bn over the course of the three months.
It remains to be seen whether Netflix's subscriber bonanza can be sustained after the service jacked up its prices to pay for its content largesse.