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Netflix reports record revenue and subscriber growth as original content pays off

By Jos
Oct 17, 2016
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  1. Netflix stock soared close to 20% this afternoon after the company reported quarterly earnings and subscriber growth that easily topped analysts' expectations. All in all, the streaming giant took in a record $2.15 billion in revenue, up 36 percent over last year, while adding 3.6 million new subscribers — plenty more than the 2.3 million it had projected.

    Specifically, Netflix added 3.2 million international subscribers, and 370,000 domestic subscribers, up from the expected 2 million and 300,000 respectively. Total subscribers are up to an impressive 86.7 million as the company further distances itself from rivals.

    Netflix attributed its stellar performance to the of its original content strategy, with hit series like Stranger Things and the second season of Narcos. While original content requires more cash upfront it pays off over time through licensing and syndication fees. It’s also free of the licensing mess that is third party content when it comes to international availability.

    According Netflix CFO David Wells, the streaming service wants to fill 50 percent of its library with original shows and movies within the next few years. It will be up to 600 hours of original programming by the end of 2016 and will bump to a whopping 1,000 hours in 2017.

    Looking toward the fourth quarter, Netflix is a little more optimistic with a goal to add 5.2 million net memberships: 1.45 million in the U.S. and 3.75 million internationally.

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  2. gigantor21

    gigantor21 TS Member Posts: 19   +13

    I will never not laugh at that picture.
     
    oranuro and SantistaUSA like this.
  3. yRaz

    yRaz TS Evangelist Posts: 1,898   +941

    Good, I always wished Netflix would be successful, but I understand that groups like the MPAA want to make stupid amounts of money limiting the content that Netflix can provide. I really want to see them be successful, I also want to seem them expand their content. I think once groups like the MPAA realize that cord cutters are a real thing and they're doing nothing but shooting themselves in the foot that they will allow streaming services like Netflix to use their content. Netflix currently isn't as great as it could be, but I think it's only at matter of time before the MPAA and similar groups see that their profits are dropping because they're too stubborn to concede to streaming services.
     
    9Nails likes this.
  4. Uncle Al

    Uncle Al TS Evangelist Posts: 1,666   +776

    Of course, those growth statistics don't reflect their most recent announcements ..... we won't know THAT impact for another quarter. I won't be surprised if the numbers are flat. Nobody can maintain sustained growth in the market place and with the election just a month away, the reaction of the market it going to be watched VERY closely.
     
  5. Wendy Oltman

    Wendy Oltman TS Booster Posts: 128   +16

    Still Netflix won't lift the geo-restriction it has IN Canada. I mean there's a difference of almost 3000 shows from here than in US. Perhaps somebody would make them realize they can double their profits then.
     
  6. Theinsanegamer

    Theinsanegamer TS Guru Posts: 372   +324

    I doubt it. The RIAA has had their head stuck in the sand since the 90s, and still refuses to embrace digital music even today. The MPAA has all the evidence it needs, between digital movie streaming and the decade-old argument for why things like geo-blocking and limited production runs of movies are a stupid idea. Yet they keep trying to restrict more and more.

    The MPAA wont figure it out. Even when their companies start going belly-up, they will simply blame pirates and clamp down even harder on controls. Nothing short of every MPAA company going out of business will fix that problem.
     
  7. petert

    petert TS Enthusiast Posts: 91   +26

    If I want original productions there are so many TV channels out there, we don't need another one. People like to bend over and take whatever crap the big corporations are throwing at them. That is why Netflix can pull tricks like this while actually not giving the customers what they signed up for. I wanna be able to chose my content, not forced to see the latest farts from netflix carefully chosen by some manager to cut costs and increase profits.

    This is also is why publishers are allowed to get away time after time with unplayable games - because the "gamers" are buying everything, even knowing that the chances to get a patch are slim. They simply cannot skip the "latest" or the "next in series" even when it has serious issues. Simply ruining the market for everyone. And you wonder why a publisher can release mafia capped at 30 fps in 2016?
     
  8. alabama man

    alabama man TS Maniac Posts: 215   +126

    All my friends that had netflix and unsubscribed it got offer for free month not that long ago, now I know why. All netflix originals seem the same, they need to add more variety. Drama is good but all good series they offer that are up do date are dramas. I live in europe, we only have the netflix originals and couple of bad movies.
     
    Uncle Al likes this.
  9. Uncle Al

    Uncle Al TS Evangelist Posts: 1,666   +776

    That's interesting .... high quarterly earnings, aggressive moves to get back subscribers ..... all point to a possible sale of the company. The next few months should be VERY interesting ...
     
  10. Kibaruk

    Kibaruk TechSpot Paladin Posts: 2,508   +501

    I'm really enjoying their original content, the series are well funded and awesomely produced. Daredevil, Luke Cage and Stranger Things are the ones that come to mind when thinking about it. Will give more of their shows a try =)

    Narcos is next on my to watch list.

    When are people going to realize the restriction is not made by netflix, but from the companies they acquire the rights from to broadcast? It's not funny anymore, nor the "profits" simplistic approach.
     
    yRaz and Jos like this.
  11. Raoul Duke

    Raoul Duke TS Guru Posts: 930   +354

    Restrictions are NOT Netflix, it's the same thing that causes, among other things, the region codes on DVD, Blu-ray and why a sporting event may be on TV in the US but not Canada. Companies pay for the rights for a country. Yes, I wish they would all get their act together. I believe a lot of people want content, but are unable to legally acquire it because of these restrictions
     
  12. Wendy Oltman

    Wendy Oltman TS Booster Posts: 128   +16

    Got it now. Thanks for the detailed info.
     
    Kibaruk likes this.

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