Netflix Subscribers, Earnings Way Up; Wall Street Gets it Wrong
Netflix announced its Q3 2016 earnings yesterday, surprising Wall Street and sending its stock soaring. The subscription video-on-demand leader announced that it added 370,000 subscribers in the United States and 3.2 million internationally. Analysts had predicted it would add 309,000 and 2.0 million subscribers, respectively. Netflix's sales for the quarter exceeded $2 billion.
The announcement showed that Netflix hasn't reached market saturation yet, and that there's still plenty of room to grow. In late trading, Netflix's share price rose by 20 percent, going even higher in Tuesday morning pre-opening bell trading.
This news comes as Netflix is aggressively boosting its budget for original programming and decreasing its licensed movie library. The company will add 600 hours of original programming this year and over 1,000 hours in 2017.
The earnings report prompted the Wall Street Journal to issue a mea culpa as its investor forecast had been far off base. Prior to the announcement, the WSJ told readers "don't binge on this stock." While Netflix's U.S. subscriber growth is slowing from previous years, it's not slowing as much as analysts thought it would. Overseas subscribers are also growing faster than many thought they would.
Finally, Netflix said it will not expand into China at the moment, citing a challenging regulatory environment.
Related Articles
Frequent flyers and train riders rejoice as Netflix announces an untethered option. The full catalog isn't supported and details are scarce.
30 Nov 2016
Hits like House of Cards, Daredevil, and Stranger Things don't come cheap. Netflix makes a break from licensed content.
24 Oct 2016
Netflix may still rule the over-the-top world, but broadcasters can succeed with their own VOD services by both learning from Netflix and playing to their own strengths.
06 Sep 2016
Netflix compared 5,000 clips from 500 titles in its library using the x264, x265, and libvpx codecs. x265's implementation of HEVC was the clear winner on quality and efficiency, but whether that matters in light of compatibility and licensing issues isn't so obvious.
02 Sep 2016
The Netflix Open Connect team announced earlier this week that it would be using Transport Level Security. Here's a look at its innovative approach to protecting viewing data at scale.
11 Aug 2016