Original programmes turboboost Netflix

NEW YORK: Netflix Inc’s blitz of original programmes attracted a surprisingly high 7.4 million new customers from January to March, reassuring investors who are betting the videostreaming pioneer’s massive spending will fuel growth around the world.

New shows like Altered Carbon helped Netflix smash analysts’ subscriber estimates, and its betterthanexpected secondquarter outlook soothed fears about competition from Apple Inc and Amazon.com Inc.

Netflix shares jumped more than 7% yesterday to $US330.30 ($NZ448.60). The stock is the top performer on the S&P 500 this year, gaining more than 60%.

Wall Street expected Netflix to add 6.5 million new subscribers, according to FactSet data. Netflix topped that and also said it would bring in 6.2 million more customers from April through June, one million above predictions.

Netflix says it will spend up to $8 billion on global TV shows and movies in 2018. As it has expanded to some 190 countries, investors accepted negative free cash flow in exchange for the potential of outsized growth in future.

In the first three months of the year, Netflix boosted original programming by 85% from a year earlier to a record 483 hours, according to analysts.

The slate included science fiction series Altered Carbon and Marvel action drama Jessica Jones.

NonEnglish programming is also gaining traction, Netflix said. That include Spanish language heist thriller La Casa de Papel, the mostwatched non-English series screened on Netflix.

For the justended quarter, revenue grew 40% yearonyear to $3.7 billion, the fastest pace in the company’s history. The average cost of a Netflix membership rose 14% during that time.

‘‘Subscribers are accelerating even at higher pricing,’’ BTIG analyst Richard Greenfield said.

‘‘Content spend is having a direct effect on its subscriber growth.’’

In a quarterly letter to shareholders, Netflix said it will ‘‘continue to raise debt as needed to fund our increase in original content’’. It added its debt levels were ‘‘quite modest as a percentage of our enterprise value.’’

The company’s market capitalisation stands at $137.2 billion, more than double a year earlier.

But it faces growing competition as technology companies such as Apple and Amazon pour money into premium programming, international rivals jump into streaming and traditional media companies pursue digital customers.

Walt Disney Co will stop supplying new movies to Netflix starting next year and will start its own streaming service for families.