Netflix just had its best quarter ever

midian182

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After it raised the price of two of its three plans last October, one might have expected Netflix’s subscriber numbers to slow down, yet the opposite happened: the fourth quarter was the biggest in the streaming service’s history.

In a forecast released yesterday, Netflix said it added a record 8.3 million new subscribers during Q4 2017. That’s up 18 percent from the same period in 2016, which saw a then-record 7.05 million new customers join. 1.9 million new members came from the US, while 6.4 million are from international markets.

The subscriber figures mean Netflix beat Wall Street estimates for the quarter, while revenue of $3.29 billion and earnings of 41 cents per share were in line with analysts’ expectations. Shares reached a record at $227.79 during trading on Monday, valuing the company at $98.4 billion. They rose 7.8% after hours, pushing its value past $100 billion for the first time.

The new signups brought Netflix’s total number of worldwide subscribers to 117.6 million last quarter, of which around 55 million are from the US. What's especially impressive about this is that the company raised the prices of its standard and premium plans during this period. While they only increased by one dollar, even small rises often discourage people from joining.

“We had a beautiful Q4, completing a great year as internet TV expands globally,” wrote the company.

Netflix singled out one of its original productions, the Will Smith fantasy Bright, as being a factor behind the quarter’s success. While it wasn’t a hit with critics, many viewers (including me) enjoyed it, and the movie became one of its most viewed originals ever, leading to a sequel that is now in production. The Punisher, Stranger Things, Black Mirror, and the excellent Mindhunter were also singled out for praise.

Netflix isn’t slowing down when it comes to investing in the future. Throughout 2018, it plans to spend between $7.5 billion and $8 billion on original content, $2 billion on marketing—up from $1.3 billion last year—and $1.3 billion on technology and development.

“Given our track record of content investments helping to increase growth, we are excited about the growth in future years from the increased investments we are making in original content this year,” the company said.

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It will be curious to see the long term effect of marvel/Disney owned shows being pulled off Netflix.
 
It will be curious to see the long term effect of marvel/Disney owned shows being pulled off Netflix.
Netflix/Disney previously stated that the Marvel series, e.g., Jessica Jones, Daredevil, etc, would not be affected. Those are Netflix property much like "Runaways" is Hulu property.

I, for one, do not plan to chase after Disney. I would much rather rent/buy Blu-ray discs than stream some of these movies.
 
That’s good and all, but is Netflix actually making/profiting money or are they losing cash quicker than they profit with all the spending for these original contents?
 
I was thiiiiiis close of buying into earnings on Monday. I thought they would miss it.... So mad at myself. Price is a little too high now for my taste but I have a hunch they will hit earnings in the next Qs.

Netflix is on a positive cash flow cycle now. Increased fees with more subscribers means more to generate "original" and other content, which then cycles back to more subscribers. If you guys go to foreign countries, you will notice Netflix is the go-to app, not HBO, not Amazon Video, not Hulu, not even close.

Plus I think the tax reform has not been embedded int he price yet. Warren Buffet made a similar comment 2 weeks ago.
 
I have had Netflix for over a year now and even with the higher price, I will get my value with it. I am retired, so have the time to watch things when others are working. I have watched many movies over that period of time and the Cost of Netflix is about the cost of an evening meal at Golden Corral. I have enjoyed both and will continue to do so. I think that once people experience Streaming Services where you don't have to have a DVR on hand it a real plus. I usually watch 3 to 4 hours of Netflix a day, so that total up to almost 100 hours in a month. I can always find something that I want to watch there and They even send regular emails announcing new shows coming up and I can go in there find that things that I want to watch and put them on my list for future viewing.
 
That’s good and all, but is Netflix actually making/profiting money or are they losing cash quicker than they profit with all the spending for these original contents?
You have to spend money to make money, but you can be sure that their CPAs will make sure things don't get out of control
 
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