Netflix about to cross 100-million subscriber mark
- Author: Salvatore Jensen Apr 20, 2017,
Apr 20, 2017, 18:49
Amazon expanded Prime Video to over 200 regions a year ago. Netflix said it will spend $1-billion marketing in 2017 to bring more attention to its shows. Revenue in the first quarter reached $2.64 billion, which was in line with estimates of $2.64 billion. Netflix credits the ongoing growth to a price change in mid 2016. "And a way to see that numerically is that, we're a competitor to HBOs and yet over 10 years we've grown to 50 million, and they've continued modestly growing, they haven't shrunk".
Netflix can be considered one of the pioneers in streaming video, having made the jump to a subscription online movie and TV show business back when DVD rentals where still fashionable.
"But we definitely see a big opportunity around the world to continue to do what we've been doing, which is make fantastic content, get people really excited about that content and continue to grow", Hastings said.
Second, with its growth in the saturating USA market steadily slowing down while its worldwide growth continues apace after expanding its reach to 190 countries last year, Netflix is on course to have more customers outside its American home base than inside for the first time by the end of this year.
Its shares dropped as much as 3 per cent in after-hours trading before rebounding to gain 1.3 per cent.
Net income rose to $178 million, or 40 cents per share, from $28 million, or 6 cents per share.
"That is not a strategy that we think is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows", Hastings said. We now model a 17% average annual decline in total U.S.net adds from 2017 to 2021 with a 21% decrease in 2017, but our projections (and consensus) may prove optimistic and problematic for the firm.
Netflix's marketing budget has almost doubled over the past few years from $607,186 in 2014 to a forecast of more than $1 billion this year.
Analysts were expecting slower growth this quarter, after Netflix expanded to more than 130 new countries in the year-earlier period. 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. It is also seeking to improve content offerings to match local tastes in Asia, the Middle East and Africa but expects this to take time.