Netflix Tops Subscriber Outlook as Spending Nears $8 Billion

Sponsored by AMA News 

=>

From Germany to Brazil, Netflix Inc. stormed ahead in its drive to create a global television network, scoring the video-streaming provider’s best third quarter on record and sending the shares to a new high.

Shows such as thriller “Ozark,” starring Jason Bateman, “American Vandal,” a spoof of true crime shows, and a Jerry Seinfeld stand-up special helped lure 4.45 million customers abroad and 850,000 in the U.S., both ahead of estimates. They came at a cost. The company is paying $6 billion for programming in 2017 and said Monday it’ll increase that by as much as a third next year.

The tricky part for Netflix is balancing its push for subscriber growth with the need to cover its soaring programming budget. This month, Netflix raised prices by $1 a month, or 10 percent, for its most popular plan in the U.S. and U.K, funds that will help defray soaring costs. In the past, price increases have led to more customer turnover. Growth slowed for just that reason in 2016.

With prices rising, the Los Gatos, California-based company forecast U.S. subscriber growth that’s less than analysts had estimated, though its outlook for international growth surpassed their projections.

Netflix rose as much as 4.1 percent to $211 in extended trading after the announcement before easing to $205.20. The stock gained 1.6 percent to $202.68 at the close in New York and is up 64 percent this year.
The company’s ever-growing budget for movies and TV shows worries competitors who are under pressure to up their own programming outlays while still increasing profit. Investors have allowed Netflix to borrow and burn through cash to fund its growth, while punishing media stocks such as CBS Corp. and Walt Disney Co. as they’ve lost viewers or advertisers.

Those companies are now creating their own online services, and some, such as Disney, are pulling programming off Netflix. In response, Netflix is stepping up spending on original shows, which will account for more than 25 percent of the company’s programming budget in 2017 and continue to expand. In all, the company’s 2018 programming budget will be as much as $1 billion larger than previously forecast.

“Investors often ask us about continued access to content from diversified media companies,” the company wrote in a letter to shareholders. “While we have multi-year deals in place preventing any sudden reduction in content licensing, the long-term trends are clear.”

During the quarter, the company signed a production deal with Shonda Rhimes, creator of hit shows including “Grey’s Anatomy,” and made its first-ever M&A deal for Millarworld, the home of comic book writer Mark Millar.

International Shows

Netflix has also boosted its investment in original programming in other languages to charm overseas who may not be interested in a New York stand-up comedian like Seinfeld, or “Ozark,” a crime drama set in the U.S. Midwest. The company just released its first Italian original series, “Suburra,” and will have programs in Japanese and Germany later this year.

Third-quarter net income more than doubled to $130 million, or 29 cents a share, the company said on its website. Revenue grew 30 percent to $2.99 billion, beating estimates. Total streaming subscribers rose to 109.3 million.

Netflix shares rose on Oct. 5, when the company announced the latest price increase, suggesting investors fear little damage this time around. Customers will be willing to pay more for a subscription because Netflix is spending more, the company has said.

More From this publisher : HERE

=>
***********************************************
See More Here: Netflix Tops Subscriber Outlook as Spending Nears $8 Billion
************************************
=>

This article was searched, compiled, delivered and presented using  TrendingTraffic 

=>>

Netflix Tops Subscriber Outlook as Spending Nears $8 Billion was originally posted by Viral News 1