Most of this growth is coming from worldwide markets, with a net addition of 3.5 million in during the period. The online streaming giant also confirms that it’s made a deal with Sandler to release four more films exclusively with Netflix. In the fourth quarter of 2015, research showed 49.1 million pay TV subscribers in the United States and that number is falling.
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“If you look across the 12-month trend, we’ve still got a lot of great growth”, Netflix Chief Financial Officer David Wells said on a conference call with analysts. Giving HBO as an example, Hastings said even as Netflix has grown, HBO hasn’t seen a decline in its paying userbase.
This wasn’t Netflix’s (NFLX) best quarter for subscriber growth, but the popular streaming service doesn’t appear overly anxious.
In a letter to shareholders, Netflix said that in regards to its Q1 performance, though it missed relative to guidance, “There were no substantial variations from our January guidance forecast”. In fact, Netflix management apparently said they could pass that milestone as early as this weekend, which is a clue for those who are playing close attention. “Netflix is available to 51.2% of US households, which is far more than its subscription rivals”. Past year brought some very well-received Netflix Originals such as Stranger Things, but even before that Orange is the New Black was also fairly successful. We don’t really care which service is being watched, we simply watch a service because it is offering the content we want to view. “The opportunity provided to us by the growth of the global internet is big and our plan is to keep investing as we increase membership, revenue and operating margins”, Netflix stated in a letter to shareholders. Despite a five point drop in its stock price this morning, Netflix is now up a little over three per cent.
By this weekend, the firm is expected to reach about 100 million subscribers globally. It expects to see the fruits of those efforts later this year.
Netflix says it plans to operate with about $2 billion in negative cash flow this year to aggressively grow its original content slate. On the other hand, the lack of big-budget productions boosted net income.
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Netflix needs to add millions of subscribers every quarter to help pay for the billions of dollars the company spends making TV shows and movies or licensing programs from others.
