Net­flix re­as­sures with growth but hits pause in China

The Myanmar Times - - Business -

US on-de­mand tele­vi­sion ser­vice Net­flix posted earn­ings that dis­pelled in­vestor con­cerns about growth and said it was shift­ing tack in China due to a “chal­leng­ing” reg­u­la­tory en­vi­ron­ment there.

Net­flix shares soared nearly 20 per­cent to US$119.60 in af­ter-mar­ket trades that fol­lowed the re­lease of quar­terly earn­ings fig­ures that showed revenues topped $2 bil­lion for the first time in a 39pc in­crease from the same pe­riod a year ear­lier.

Net­flix said that it gained 3.57 mil­lion paid sub­scribers to its stream­ing ser­vice in the quar­ter, with most of those com­ing from out­side the United States.

The com­pany fin­ished the quar­ter with 86.74 mil­lion sub­scribers, higher than it had ex­pected.

Of that num­ber, 39.25 mil­lion sub­scribers were in­ter­na­tional, in a sign that the com­pany was gain­ing mo­men­tum as a global tele­vi­sion ser­vice.

Net­flix was op­ti­mistic for the current quar­ter, fore­cast­ing a gain of 5.2 mil­lion sub­scribers, with 3.75 mil­lion of them from coun­tries other than the US.

Net­flix cred­ited a strong line-up of orig­i­nal pro­gram­ming in­clud­ing ’Stranger Things’ and ‘Nar­cos’ help­ing win fans to the ser­vice.

The earn­ings re­port re­as­sured in­vestors af­ter growth of only 1.68 mil­lion sub­scribers in the pre­vi­ous quar­ter damp­ened en­thu­si­asm for shares on Wall Street.

Net­flix is the world’s lead­ing in­ter­net tele­vi­sion net­work, boast­ing a pres­ence in nearly ev­ery coun­try af­ter a ex­pand­ing glob­ally early last year.

The on-de­mand tele­vi­sion ser­vice cred­ited with giv­ing rise to “binge view­ing” has won devo­tees with its own hits such as ‘House of Cards’ and ‘Orange is the New Black’.

No­tably miss­ing from Net­flix’s global foot­print is China.

“The reg­u­la­tory en­vi­ron­ment for foreign dig­i­tal con­tent ser­vices in China has be­come chal­leng­ing,” Net­flix said a let­ter to share­hold­ers.

“We now plan to li­cense con­tent to ex­ist­ing on­line ser­vice providers in China rather than op­er­ate our own ser­vice in China in the near term.”

For the re­cently ended quar­ter, Net­flix rev­enue climbed 32pc to $2.3 bil­lion and net in­come leapt 75pc to $52 mil­lion.

Per share earn­ings for the quar­ter and that fore­cast for the re­main­der of the year were bet­ter than what was ex­pected by an­a­lysts. –

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