Strong sub­scriber growth lifts Net­flix quar­terly rev­enue, profit

Business World - - WORLD BUSINESS -

SAN FRAN­CISCO — Net­flix added 7.4 mil­lion new sub­scribers in the past quar­ter as the global tele­vi­sion giant ramped up prof­its with its strong­est-ever rev­enue growth since launch­ing its stream­ing ser­vice.

In its quar­terly up­date Mon­day, Net­flix re­ported prof­its grew 63% from a year ago to $290 mil­lion, while rev­enues jumped 43% to $3.7 bil­lion.

Net­flix’s new mem­ber ad­di­tions boosted its sub­scriber base to 125 mil­lion world­wide, in­clud­ing 118.9 mil­lion paid sub­scribers.

The Cal­i­for­nia-based video giant, which has been on a tear with orig­i­nal pro­grams in­clud­ing The Crown and Stranger Things, saw its shares surge 6.5% in af­ter-hours trade on the stronger-than-ex­pected re­sults.

Net­flix has raised its sub­scrip­tion fees as it ex­pands glob­ally to nearly 200 mar­kets and in­vests heav­ily in orig­i­nal pro­gram­ming.

The com­pany plans to in­vest up to $8 bil­lion this year in new TV se­ries, films, doc­u­men­taries and other pro­grams in sev­eral lan­guages “to serve the di­verse tastes of our grow­ing global mem­ber­ship base,” the com­pany said in its let­ter to share­hold­ers.

Re­cently re­leased pro­grams in­clude the sci-fi thriller Al­tered Car­bon and A Se­ries of Un­for­tu­nate Events.

Ear­lier this month, Net­flix pulled out of the Cannes film fes­ti­val in a dis­pute over rules for French me­dia re­leases.

The move came in re­sponse to a new Cannes rule ban­ning from the com­pe­ti­tion movies that are not first re­leased in French cin­e­mas.

In its let­ter Mon­day, Net­flix said the de­ci­sion was made be­cause of a stip­u­la­tion that if a film is in com­pe­ti­tion at Cannes, it can not be watched on Net­flix in France for the fol­low­ing three years.

“We would never want to do that to our French mem­bers,” the let­ter said.

“We will con­tinue to cel­e­brate our films and film­mak­ers at other fes­ti­vals around the world but un­for­tu­nately we will have to sit out Cannes for now so that our grow­ing French mem­ber­ship can con­tinue to en­joy our orig­i­nal films.”

Net­flix added 1.96 mil­lion new US mem­bers in the quar­ter and 5.46 mil­lion in­ter­na­tion­ally.

The in­ter­na­tional seg­ment now ac­counts for 55% of mem­ber­ships and 50% of rev­enues.

Net­flix this year won its first Academy Award this year for the doc­u­men­tary Icarus on dop­ing in sports.

“We’re thrilled when the cre­ators with whom we part­ner are rec­og­nized for their ex­cep­tional work,” the state­ment said. “The Os­car win helps to re­in­force that Net­flix is a great home for both doc­u­men­tary lovers and cre­ators.” —

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