Published: Wed, October 17, 2018
Entertaiment | By Lawrence Myers

Netflix soars as blistering subscriber growth restores faith

Netflix soars as blistering subscriber growth restores faith

Netlix shares surged more than 11 percent after the online TV service reported crowd-pleasing quarterly results after the market closed on Tuesday.

Chief Product Officer Greg Peters said Netflix is "just getting started in India" and that the company has a long runway ahead of itself.

Netflix never identifies which shows are most successful.

The numbers are likely to restore investor confidence in the streaming service, which when reporting second-quarter earnings in July fell short of analysts' forecast for new subscribers by more than 1 million.

App analytics provider Sensor Tower pointed to the signs of increased growth that the market has grown accustomed to, with Q3 earnings from in-app subscriptions rising by over 90% YOY thanks to some 50 million new installations.

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Netflix plans to spend about US$8 billion on programming this year.

New customers were lured in by returning seasons of "Orange is the New Black" and "Marvel's Luke Cage", as well as new shows such as "Ozark" and "Maniac", the limited series starring Emma Stone and Jonah Hill, Netflix said. In all, Netflix added nearly 2 million more subscribers than the 5.09 Wall Street expected. Net income came in at 89 cents per share, beating Wall Street's number by 21 cents a share.

Netflix also reported revenue of $4 billion, in line with consensus estimates, and it issued an optimistic forecast for the current three months.

Netflix's net income rose to $402.8 million, or 89 cents per share, in the third quarter ended September 30, up from $129.6 million, or 29 cents per share, a year earlier. It added 6.96 million new subscribers, exceeding expectations and coming in particular relief after the company disappointed during its previous quarter.

"We'll take it at a million at a time", CEO Reed Hastings told a post-earnings interview of subscriber growth in India, which Netflix declines to break out, citing competitive factors.

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Watch Netflix trade in real time here. The number of people paying for cable or satellite has fallen in recent years, denting profit at the world's largest media companies and triggering a wave of mergers. While most of that still funds shows licensed from other companies, original programs account for a growing share.

But the company continued to burn through cash to pay for its programming. Disney and AT&T, the parent of Warner Bros. and HBO, are each looking to introduce new services next year - after completing takeovers of other companies worth a combined $160 billion.

Is Netflix anxious about competition yet?

"That's going to make it exciting for us, great for consumers and incredible for producers", he said. "The game is on".

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