Netflix Inc has racked in more than 2 million subscribers in recent time, particularly the last three months of 2017, thereby tripling profits at the online video service that is burning money on new programming to dominate internet television around the world.
The company has signed up more than half of all U.S. broadband households and is building its customer base in 190 countries through expenditure of billions on programming.
The results pushed Netflix to a market capitalization of more than $100 billion for the first time. Company shares jumped 9 percent to over $248 in after-hours trading on Monday after rallying throughout the month and rising 53 percent last year.
According to FactSet, Netflix picked up 6.36 million subscribers in international markets from October through December, when it released new seasons of critically acclaimed shows “Stranger Things” and “The Crown” as well as Will Smith action movie “Bright.” That topped Wall Street expectations of 5.1 million.
Along with 1.98 million customer additions in the United States, the company concluded the year with 117.58 million streaming subscribers around the globe, despite a price hike in October.
According to BTIG analyst Richard Greenfield, they see a huge opportunity and they are moving as fast as they can to attack it.
The company also said it took a $39 million non-cash charge for unreleased content they’ve decided not to move forward with. The charge was related to content starring Kevin Spacey, with whom Netflix cut ties after he was accused of sexual misconduct.
The company temporarily halted production of “House of Cards” to write out Spacey’s character and decided not to release the film “Gore,” which starred Spacey as Gore Vidal.
Spacey has made an apology to one of his accusers, and according to his representatives is seeking unspecified treatment.
The accusation is one of the first signs of costs faced by companies in the wake of a widespread campaign against sexual harassment.
Netflix turned a DVD-by-mail business into an online competitor of movie channel HBO. As it grew it began licensing its own original shows to ensure a stream of new offerings if studio suppliers ended deals.
In fact, Walt Disney Co (DIS.N) is making a major push into online streaming and will pull its first-run shows and movies from Netflix in 2019 as Hollywood struggles for audiences.
Netflix plans to spend up to $8 billion in 2018 on TV shows and movies to fend off Disney, Amazon.com Inc (AMZN.O), studios-owned Hulu and local competitors that are jumping into online video, and it is turning more and more to high-budget projects, such as the roughly $90 million “Bright.”
Reuters
