Netflix shares head for new high after strong subscriber outlook
Apr 19 2017
Netflix's recently introduced download option for certain titles and series is sizing up to be a nice-to-have, rather than critical, feature for its massive subscriber base, according to CEO Reed Hastings.
"We expect to cross the 100 million member mark this weekend", Netflixwrote in its letter to shareholders Monday.
The company will reach that milestone this weekend if its projections are correct.
The company is reliant upon marketing to attract viewers to its exclusive content, to do so it will target potential cable cutters to attract a new generation of viewers still to make the leap to its archives.
If Netflix reaches 100 million subscribers this weekend, that means it's already added 1.25 million subscribers - or almost 40 percent - so far this quarter, well on its way to making its guidance of 3.2 million adds.
Over the past decade, "what really did it for Netflix was the explosion of phones and tablets that allowed people to watch video everywhere", said Wedbush Securities analyst Michael Pachter.
Unlike rival Amazon (AMZN, Tech30), there is at least one category Netflix plans to steer clear of: football.
In that time, Netflix has added 72 million more subscribers. "I think this is going to increasingly drive numbers".
The company said first-quarter profit more than quadrupled to $178 million, or 40 cents a share, compared with analysts' predictions of 37 cents. Netflix ended March with almost 48 million subscribers outside the U.S.
Until recently, Netflix had competition in the U.S. only from Hulu, owned by major media companies like Disney, Comcast and Time Warner. The online streaming giant also confirms that it's made a deal with Sandler to release four more films exclusively with Netflix.
Criterion Collection had chose to start its own streaming company with Turner Classic Movies, Filmstruck.
Shares took a bit of beating in after-hours trading Monday, primarily due to a weaker-than-expected increase in total subscribers. "We have YouTube envy", Hastings joked.
Will Netflix Raise Prices Again?
Netflix planned to spend a billion dollars this year on marketing aimed at attracting members.
Sacred Games, a Netflix original series in India, was also used an example of an global show Netflix is producing that is Hollywood-level quality. Amazon expanded Prime Video to over 200 regions a year ago.