Netflix’s subscribers are surging again as it blows away Wall Street’s expectations


For the second quarter in a row, Netflix has handily beaten
industry watchers — and its own expectations — in adding a
mountain of additional new subscribers.

Netflix today said it added 5.2 million additional new
subscribers this quarter, a number well above the 3.2 million
new subscribers additions that it set itself — and the stock
promptly jumped nearly 9%. More than 4 million of those new
subscribers are international viewers, and it still added more
than 1 million domestic subscribers despite its big push into
markets beyond North America.

As usual, the subscriber numbers are the main thing that Wall
Street watches. Netflix can do what it can to alter the
calculus of its operations in order to juice out a better
earnings report, but subscriber growth — like user growth for
Facebook and anything along those lines — are what will
determine the future fiscal success of the company. Netflix
dominates locally, but international audiences represent a much
more tantalizing opportunity that it has to grow into.

The company in January said its net subscriber additions came
in at 2 million domestically and 5 million internationally,
well above what Wall Street expected at the time. Netflix has
made big bets on content domestically, but it’s also had to
figure out ways to grow that international audience as the
company has started to make a larger push there as it
increasingly saturates domestic eyeballs. Netflix has lately
referred to the success of some of its international
first-party content like its original series 3%.

On the financial front, Netflix said it had earnings of 15
cents per share on revenue of $2.79 billion. Analysts were
expecting earnings of 16 cents per share on $2.76 billion in
revenue. Again, it’s about in line here, but the subscriber
numbers are the most important ones.

These bets on high-quality original content seem to be paying
off. Netflix racked up a large number of Emmy nominations
this year
. The trick, still, is to parlay those
Emmy-quality shows into growth in its subscribers — and make
them attractive to both domestic audiences and international
ones while it starts to fill in the demand gaps abroad. Netflix
expects to spend $6 billion on original content this year, and
as its users demand more and more content, that number may only
rise.

 


Featured Image:
Markus Henkel
/Flickr UNDER A CC BY 2.0
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