Netflix surges on massive subscriber growth

Markets Insider

Markets Insider

"That's a really good number for a market that's this mature".

"We'll take it at a million at a time", CEO Reed Hastings told a post-earnings interview of subscriber growth in India, which Netflix declines to break out, citing competitive factors.

Why it matters: It's impressive to see Netflix's growth from a DVD-by-mail outlet to the industry's leading video streaming outfit, complete with compelling original content production.

For the current quarter, Netflix forecast it will add 1.8 million customers in the United States and 7.6 million in worldwide markets.

Netflix anticipates that it will be able to meet this new European criteria when it arrives but as Hastings notes, the company would "prefer to focus" on making a great service that includes local content rather than being forced to create a specific amount of shows, documentaries or movies just to fill a quota.

Shares of the company were up 10 percent at $381.21 before the bell.

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Subscriber growth is key to keeping up with the investments.

Of course, the quarter also attracted its share of controversy, including the debut of Insatiable, which earned accusations of fat-shaming. Analysts were looking for $0.68 a share. But most of these options are either significantly more expensive than Netflix, offer less variety or come with annoying ads.

The Los Gatos, California-based company said revenue jumped 34 percent to $4 billion, matching estimates of Wall Street analysts polled by Refinitiv. Nor does the company release viewership figures for programs, contending that its subscriber growth demonstrates the popularity of its entertainment slate.

As for earnings, Netflix generated $4 billion compared to the $3 billion it took in a year earlier. Netflix doesn't break out its customers by market, with the exception of the U.S., though most analysts agree the UK, Brazil, Canada and Mexico rank among the company's largest.

Netflix has spent almost $7 billion on programming through the first nine months of the year, and plans to boost its investment in the years to come. The number of people paying for cable or satellite has fallen in recent years, denting profit at the world's largest media companies and triggering a wave of mergers.

The Netflix executive highlighted the streaming service's varied content palate, with the addition of new animated adult comedies - Disenchantment, from Matt Groening, creator of The Simpsons and Futurama, and Paradise PD, from the makers of Brickleberry, to complement Big Mouth, Bojack Horseman and F is for Family - and its popular romantic comedies, including To All the Boys I've Loved Before, one of the service's most-viewed original films with strong repeat viewing. "The game is on".

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