Netflix's scramble to expand overseas has paid off, as it reported that, for the last quarter of 2016, it has amassed an additional 7.1 million subscribers. The announcement has promptly sent its stocks to an extended trading rally by more than 8 percent.
Netflix Q4 Growth
International customers account for the bulk of the new subscribers. More than 5 million have chosen Netflix over other competing platforms compared to the modest gains in the United States, which only ended with 1.93 million additional streaming users.
To be fair, the last quarter is historically a strong period for the streaming platform in terms of sales. One should note, however, that analysts have predicted that Netflix would only snag about 5 million subscribers for the period.
On the other hand, it appears that additional subscribers do not immediately translate into revenue for Netflix. The company has posted $2.48 billion income. Now, this is aligned with the analysts' projected $2.47 billion revenue forecast. Remember that one of the contexts of this estimate is the 5 million predicted users.
Netflix Anniversary And International Expansion
The 2016 Q4 figures have effectively expanded its user base to almost 94 million. Interestingly, U.S. and international subscribers are already nearly splitting that number. The former claims a little more than 49 million, while the number of consumers overseas has already breached the 44 million mark.
Netflix has gradually expanded overseas since 2010. However, faced with sluggish growth in the home front and increased competition posed by companies such as Amazon Prime, the streaming company pursued an aggressive international expansion last year, bringing the service to 130 new markets.
In the Netflix Q4 report, one will find that while it saw strong global performance, the company is facing a decline in the United States.
Overall, the higher-than-expected performance has been a welcome news for Netflix, which is celebrating its 10th anniversary this month. The company has, of course, been in existence for more than a decade, but its streaming service only had its debut in Jan. 16, 2007.
New Netflix Contents
To leverage its momentum and address its anemic growth at home, Netflix says it will be spending $6 billion on content this year. No details have been provided how that amount will be allocated between original and licensed contents.
The move, however, is expected to boost Netflix's competition with Amazon especially since it has a significantly diminished catalogue. The combined titles in its library constitute about 10,000 compared with the impressive 18,000 movies and 2,000 TV shows offered for Prime subscribers.
Subscribers can, therefore, expect an impressive Netflix lineup for 2017. A Series of Unfortunate Events, a Netflix original, has already premiered last Jan. 13. Other upcoming titles include Marvel's Iron Fist and Anne, while Stranger Things, Sense8, and Real Rob, among others will be coming back for new seasons. Tech Times has the complete list of this year's lineup.
