Netflix revealed that it has added nearly 7 million new subscribers in the last quarter. This was quite high compared to the 5 million projected by the online streaming service. The new numbers mean that Netflix now has a subscriber base of more than 137 million people all over the world. The company stocks surged by 14% after the figures were released in what was a very strong showing in a while now. Netflix was hammered by shareholders after it failed to hit subscriber growth and earnings targets in July. The big tech sell-off that was witnessed in the market over the last few days also had a profound effect on its shares.
Netflix is also projecting it will add at least 9.4 million subscribers to its platform this year. Although growth targets for the second quarter of the year failed short by 1 million, it seems the robust numbers recorded in the third quarter could easily cover up for this shortfall. It’s, therefore, more likely that the 9.4 million subscriber target will be met and even exceeded if the current momentum is maintained. However, Netflix did note that these figures included all subscribers including those that are using the free monthly trial. It’s not clear though how many of the 7 million new users are paid subscribers and how many are trial subscribers.
Nonetheless, Netflix says that it has over 130 million paid subscribers. It’s also interesting to note that 6 out of the 7 million new subscribers recorded in the third quarter came from overseas. Analysts think that targeting overseas markets is one of the most promising growth strategies for Netflix and in fact, the online streaming giant was quick to observe that international growth this year has been stronger than expected.
But this is not a surprise seeing the massive push by Netflix to get new international customers. For instance, in 2018 alone, the video streaming service is expected to launch at least 80 foreign language productions in various countries. Some of the recently released shows have in fact been well received including the German thriller “Dark” and India’s crime drama “Sacred Games.” Netflix is also working to ensure that international subscribers get access to over 700 new programs.
The company has really gone big on content production with billions of dollars in investment over the last 12 months. As a result, Netflix could be expecting negative-free cash flow this year with the same scenario projected for 2019. The company has confirmed that it intends to spend $8 billion in content this year. Some of the productions already released have paid dividends with massive viewership.
Netflix feels that stepping up on content production is the only way to compete with other major entertainment companies that are also entering the streaming industry. Some of the notable companies that have already launched plans to enter the market include Disney and Warner Media. Existing services like Amazon Prime and Hulu are also stepping up efforts to consolidate their subscriber base too.