Despite some analysts worrying that Neflix would suffer from a drop in subscriptions after announcing a price raise (read more here), it turns out their fears were unfounded. Fortune reports that:
The company’s stock was up roughly 1.5% in after-hours trading after it already closed Monday at an all-time high of $202.68. Netflix posted third-quarter results that included $2.99 billion in revenue, up more than 30% from the same period last year, along with 5.3 million net subscriber additions to bring the company’s total number of streaming members to over 109 million.
This beat expectations of 4.4 million subscribers Fortune says. This could be a major development for the world’s largest streaming company, as they look to grow even further in the coming years.
The Wall Street Journal (via Fox Business) says that a good amount of the company’s growth has resulted from oversees customers signing up. This bodes well for Netflix as they continue to expand their reach globally. While many network stations offer their content online in their home countries, Netflix has the advantage of being able to sell its own unique content across the world.
As Netflix looks to add more self-produced content in the future the raised prices coupled with a larger subscriber base may make all the difference. With the advent of shows such as Game of Thrones and Stranger Things, TV shows have become a high budget enterprise. According to Fortune, Netflix “is spending over $6 billion this year on its own original TV content,” which gives you an idea of how high their costs have gotten.
The increase in price as well as the surprisingly high number of new subscribers this quarter put Netflix in a great place going forward. Their revenue should continue to grow thanks to these favourable figures.
To read Fortune’s article on Netflix’s earnings, click here.
To read the Wall Street Journal’s article on Netflix’s subscriber growth, click here.
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