Beating all expectations, the streaming giant finds growth in international markets.
In the last couple of years, it feels as if everyone in Hollywood is either working with Netflix or planning to. They have also changed industry dynamics by spending millions on bagging high profile content creators like Shonda Rhimes, Ryan Murphy and many more.
Those decisions seem to have paid off though because Netflix has added 7.4 million (new) subscribers by finding growth in international markets and having done so, they have beaten expectations.
The company revealed on Monday that the numbers have beaten their own projection of 6.35 million subscribers. They have also posted 3.7 billion dollars in revenue.
According to Hollywood Reporter, CEO of Netflix, Reed Hastings noted that 43 per cent revenue growth was “the fastest pace in the history of our streaming business.”
It also looks like Netfix is still going to spend 8 billion dollars on content in 2018 alone even as it faces competition from Amazon, Hulu and the upcoming streaming service(s) from Disney and Apple.
In a statement, Hastings noted, “Our 125 million members provided us with $3.6 billion in streaming revenue in Q1 (first quarter). Our job is to spend this money wisely to increase our members’ delight.”
He added: “Last year, we expanded our efforts in original programming to unscripted shows across several genres. Our output in this area is now comparable to similarly-focused U.S. domestic cable networks. Shows like Queer Eye and Nailed It are great examples of our ambitions in this area: engaging, buzz-worthy shows that drive lots of enjoyment around the world.”
Hastings also wrote that while content deals with Ryan Murphy, Shonda Rhimes, Shawn Levy and Jenji Kohan “are a substantial investment for us, they allow us to work directly with prolific and talented creators with a proven track record of success.”
In a question and answer forum after the release of Netflix’s quarterly earnings report on Monday, Hastings went on to add that the service’s “breadth of content is really remarkable.”
Chief content officer Ted Sarandos, who was also present, did reveal that Netflix has no plans of getting into streaming news content though they do have interview programs like My Guest Needs No Introduction with David Lettermen. She also revealed that negotiations are still underway with President Barack Obama but whether or not he would host a similar Lettermen-esque show remains to be seen. Sarandos also noted that Netflix has released more than 30 films in cinemas with plans for many more.
As for Hastings, he is not worried in the wake of the Facebook scandal. As he told analyst Ben Swinburne in an interview, “Well I’m very glad that we’ve built a business not to be ad supported but to be subscription. We’re very different from the ad supported businesses and we’ve always been very big on protecting all of our members’ viewing.”
He added: “I think we’re substantially inoculated from the other issues that are happening in the industry, and that’s great. Second, I’d point out that we’ll spend over $10 billion on content and marketing and $1.3 billion on tech so just objectively we’re much more of a media company in that way than pure tech. Now, of course, we want to be great at both, but again, we’re really pretty different from the pure tech companies.”
– With information from The Hollywood Reporter and The Wrap
