Netflix on the verge of hitting 100 million subscribers

Ausiliatrice Cristiano
Aprile 21, 2017

Consolidated Q1 revenue and adjusted EPS of $2.64 billion and $0.40 compared with Baird's $2.62 billion and $0.36 estimates.

By comparison, Google says about 1 billion hours of video per day are watched on its mostly free YouTube service. They had gained 15 percent this year through April 13.

The prediction comes as the service made public it's Q1 2017 results, reporting an added 1.42 million subscribers in the US, with an additional 3.53 million in the rest of the world. "There's nothing here that changes the thesis", said Anthony DiClemente, an Instinet LLC analyst who recommends buying the shares.

TV streaming company Netflix is to heavily invest in its marketing drives in 2017 to entice subscribers in a bid to drive it past the 100m members waypoint.

"We've said previously subsequent seasons of show that are very popular tend to have more impact on the business than introducing brand new IP [intellectual property]", explained Netflix Chief Content Officer Ted Sarandos during the webcast. Worldwide additions came to 3.53 million, which was lower than its own guidance for 3.7 million. The company, which has committed $US15.3 billion ($20.2 billion) for movies and TV shows over the next five years, hasn't given any indication it plans to slow those outlays and said overnight that it plans to raise money.

The company expects to reach this milestone over the coming weekend, if its projections remain on course.

The heavy second-quarter schedule comes with costs and highlights a dilemma.

"We definitely see an incredible opportunity around the world", Hastings added.

Top-line sales should increase by 31%, landing near $2.76 billion.

Analysts on average had estimated 3.68 million additions, according to research firm FactSet StreetAccount.

Netflix CEO Reed Hastings expects the next 100 million subscribers to come more quickly than the first 100 million, but he didn't provide a specific timetable during online video review of the company's first quarter.

This means the streaming company is paying virtually no tax outside of the United States, where it made a taxable profit of $606 million from revenues of $1.47 billion.

The company wants to be assessed in the future based on sales and margins, as opposed to subscriber growth.

"The company needs to plan for a future in which its USA business is virtually saturated, and overseas growth starts slowing", said Paul Verna, eMarketer principal analyst focused on digital video.

In North America, key releases this past quarter included A Series of Unfortunate Events, a dark comedy, Santa Clarita Diet, a "zom-com" starring Drew Barrymore, and Ultimate Beastmaster, Netflix's first competition show that pits athletes from around the globe against a fearsome 600-foot obstacle course. The company has a market capitalization of $60.15 billion, a P/E ratio of 325.02 and a beta of 1.27.

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