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Beating both analysts’ forecasts and its own, Netflix added 8.3 million subscribers globally in the fourth quarter of 2017, marking the streaming giant’s highest quarter in history.

The figure was up 18 percent over the 7.05 million net adds in the last quarter of 2016, and significantly exceeded Netflix’s forecast of 6.3 million. Netflix attributed the uptick to its original content slate and growing international adoption of the streaming service. Netflix now has a global streaming subscriber base of 117.58 million.

In the U.S., Netflix added nearly 2 million subscribers in Q4, compared to its forecast of 1.25 million, and expanding that base to 54.75 million. The streaming service saw its international streaming subscriber base grow by 6.3 million, beating its guidance of 5.05 million, for a total of 62.83 million.

“We had a beautiful Q4, completing a great year as internet TV expands globally,” Netflix said in its fourth quarter letter to shareholders.

As for the upcoming quarter, Netflix expects to add 1.45 million domestic streaming subscribers in Q1 2018, and 4.9 million international streaming subs.

Financially, Netflix reported $3.28 billion in revenue up 32.6 percent from $2.47 billion in Q4 2016. Net income was $186 million, or 41 cents per diluted share.

In a letter to shareholders, Netflix said it believes the company’s big investments in content are paying off. For 2017, the average streaming hours per membership grew by 9 percent year-over-year. With the jump in subscriber growth, resulting in more revenue, Netflix said it now plans to spend $7.5 to $8 billion on content this year. Marketing spend for content will also increase from about $1.3 billion to approximately $2 billion this year, “because our testing results indicate this is wise,” the company said.

The company noted that’s increasingly producing original content in-house, and as part of that initiative signed overall deals with Stranger Things producer Shawn Levy, and Orange is the New Black and GLOW creator Jenji Kohan in Q4.

“Our goal is to work directly with the best talent to bring amazing stories to our members all over the world,” the company wrote.

 

Netflix noted its growing number of partnerships with MVPDs, pointing to U.S. deals it struck with Cox communications and Verizon in Q4 and an expanded global partnership with Deutsche Telekom.

"These partnerships make it easier for consumers to sign up, enjoy and pay for Netflix, while our service allows our partners to deepen their relationship with these subscribers,” Netflix noted.

On the competition front, Netflix said Amazon studios could likely be a strong new leader due to its large content budget, and acknowledged Apple is ramping up content efforts, “which we presume will either be bundled with Apple Music or iOS.”

Netflix also pointed to Disney’s pending acquisition of 21st Century Fox, and its plans to launch a direct-to-consumer service next year.

“The market for entertainment is vast and can support many successful services. In addition, entertainment services are often complementary given their unique content offerings,” Netflix said. “We believe this is largely why both we and Hulu have been able to succeed and grow.”  

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