Netflix shares surged over 20 percent in trading after hours on Monday, following news that the company has accumulated more subscribers than it anticipated in the third quarter of its. Netflix attributed that the 3.2 million new subscribers to the interest in new series like Stranger Things and Luke Cage as reported by the Guardian.
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Netflix’s revenues topped $2bn at the beginning of its existence for the first time. The increase in subscribers was nearly double the revenue of the same quarter last year, when a dramatic decline in growth had led the company’s shares to an ebb. But it wasn’t in the same way as it increased in the second period of 2015.
Within the US, Netflix added 370,000 subscribers during the September quarter. That’s more than was expected, however it was significantly lower than the previous quarter, when it added 880,000 US subscribers.
Globally, Netflix added 3.2 million subscribers, far exceeding the forecast of 2 million. The same period the year before, Netflix increased its subscriber base to 2.74 millions subscribers however it has since risen into 130 different countries.
Reed Hastings, chief executive officer, also said that the company could permit speculation of downloading to mobile devices for viewing movies offline , such as on the air or in underground trains for instance. However, he would not declare when, although some reports suggest the launch date as the close of 2016. “What we said this year is that we’re open to it, it’s something we’re looking at, but we don’t have anything specific to offer.”
Netflix has had a difficult time breaking into markets outside of the United States especially China however, it declared the company had achieved success on Monday even although it would not reveal the location. The secret to its success, according to Hastings is hidden. “For competitive reasons, we’re really not going to break out per-country markets and results,” Hastings stated in response to a question about which countries were performing better than others.
There was also veiled talk of rumors suggesting that Disney could acquire the company. However, Hastings believes that Disney’s quest for online distribution will likely lead to Disney developing its own application.
Analyst forecasts for the growth of subscribers corresponded to the figures reported by Netflix However, Netflix’s earnings per share were twice what analysts had predicted due to a significant increase in revenue.
The rising revenue of Netflix may be due to the company’s gradual price increases – which the company refers to it as “un-grandfathering” – on older less expensive Netflix subscriptions. Netflix has faced certain subscribers who have opted out of their subscription, however not all of them.
The company is continuing to expand its presence in international markets, particularly through investing in programs that have local appeal.
Netflix also licenses content from other networks at a huge cost. This cost has increased by $1 billion in the past three months, to $14.4bn.
This has a lot to have to do with the expansion of our initials as well as our international ventures,” said Wells. “I would expect that to moderate in an 18-to-24-month period.”
