tiptrot.com June 20, 2018

Netflix Hits 125 Million Subscribers as Q1 Revenue Surges 43% YoY

17 April 2018, 10:39 | Gerardo Harmon

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When Netflix announced their plans to go global, no doubt that this was great news as it meant more subscribers, and Netflix's efforts are definitely showing because according to the company's latest quarterly report, they are now boasting a subscriber count of a whopping 125 million.

The decline primarily stemmed from discounts that Spotify gave for its family packages and students, helping to increase its paid subscribers from 28 million in 2015 to 71 million at the end of previous year - almost twice as many as Apple Music, its biggest rival.

In its results, worldwide subscriber base increased by 5.5 million members to 68.3 million, better than than the 4.9 million additions the company predicted. BidaskClub lowered Netflix from a buy rating to a hold rating in a report on Saturday, December 2nd.

In other Netflix news, CEO Reed Hastings sold 75,271 shares of the company's stock in a transaction that occurred on Tuesday, March 20th.

Revenue grew 40 percent to $3.7 billion, the fastest pace in the organization's history.

Netflix added about 8.3 million net new subscribers in the fourth quarter of 2017 after it predicted it would add 6.3 million.

Walt Disney has also previously said it will stop supplying new movies to Netflix starting next year and will start its own streaming service for families.

Recent talk shows from the likes of David Letterman should be considered entertainment, not news, he stressed.

Netflix is making a calculated bet - and an understandable one - that it can continue to borrow money to finance its programming splurge until it has enough paying customers to foot its own bills.

Netflix demonstrated how well its formula works again this week with the release of its first-quarter earnings. This measure, in short, is a rear-view mirror of the content Netflix agreed to purchase or create in the past, which is beginning to show up in the company's income statement.

The company said it still expects to spend up to $US8 billion on content this year. It also reportedly coughed up $300 million to hire Ryan Murphy, the power producer behind "Glee".

Spotify's music-streaming service has emerged as the most celebrated of the aspiring clones, despite significant challenges that will make it hard to keep growing at the same pace as Netflix has been in video streaming.

The decrease in Spotify's average price per subscriber will make it more hard to turn a profit, something that the company has never done since its inception in 2007. That was due to the combination of adding 7.4 million new subscribers, the most ever for Netflix in a first quarter, plus the price hikes the company pushed through past year, leading to a 14% increase in the average monthly subscription price.

Still, Netflix continues to face stiff competition. Even Facebook is pushing deeper into video content. Netflix itself has tried to get investors to focus on other numbers, including its revenue and a measure of profit that excludes some types of expenses.

The belief among analysts like Deutsche Bank's Brian Kraft is that Netflix has too much of a head start to lose now.

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