Monday April 17, 2017

Netflix Is on the Verge of Reaching the 100 Million Subscribers Mark

Netflix is estimated to have 98.7 million subscribers globally in 190 countries as of March 2017. At the rate that they are adding subscribers, 5 million in the first 3 months of the year, they should easily eclipse 100 million by the end of April. Also international viewership (48 million) is expected to surpass domestic viewer numbers (51 million) in 2017. They accredit much of this growth to tablets and smartphone usage.

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The company has historically lost money on it's international viewers. They had lost $1.5 billion until they turned a $43 million profit the first quarter of 2017. They expect to post a $28 million loss for the current quarter though. Domestically, Netflix is in much better shape as they have posted a $178 million profit and is expected to rake in $482 million by the end of the year. With a market value of $63 billion, Netflix is poised to take on the HBO. There is chatter that investors want another price hike though.

For all its success, Netflix still has a ways to go to catch up with HBO, the popular pay-TV channel that has served as its role model. HBO has 134 million subscribers worldwide, including viewers paying for an internet-only version of the channel that was inspired by Netflix's success. Other cable channels also are offering internet-only options as more viewers, especially younger people, eschew traditional TV packages and subscribe to streaming services instead.

But Pachter and other analysts wonder how long Netflix will be able to hold the line on price as its programming costs rise in tandem with its appeal to a more diverse international audience. Movie and TV studios typically also demand more money as more people subscribe to channels to in an effort to make as much as possible off their content. As it is, Netflix expects to spend about $6 billion on programming this year.