Published: Thu, April 20, 2017
Business | By Sandy Mccarthy

Netflix on the verge of hitting 100 million subscribers


The company will reach that milestone this weekend if its projections are correct.

Netflix started making its own shows in 2013, with House of Cards one of its first big hits and Stranger Things more recently. This is a bit less than the company's own projections that saw it predict 5.2 million subscribers in the first quarter - 1.5 million in the USA and 3.7 million internationally.

People were able to watch videos everywhere on their smartphones and tablets, said Michael Pachter Wedbush Securities analyst. If the current trend continues, Netflix could become a global powerhouse that trumps any broadcasting giant in any country.

By the end of the second quarter, for instance, it expects to have 51.45 million USA streaming memberships and 50.49 million worldwide ones as the gap between the two regions continues to narrow. However, investors have been closely watching for signs of a slowdown in growth as the company reaches almost 100 million subscribers.

Up to Monday's close, the company's stock had risen almost 19 per cent this year, outperforming the roughly 5 per cent gain in the broader S&P 500 index. U.S.net additions slowed to 1.4 million from 1.9 million in the previous quarter. In today's time, its stock has increased from $US1.90 to $149.15.

Netflix expects to add 2.6 million subscribers internationally next quarter - it launched in 130 additional countries previous year - and 600,000 subscribers in the USA, both which exceed analyst estimates.

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He downplayed competition, saying "entertainment is not a zero-sum game" and it is more about winning fans with content in the on-demand viewing market.

"We don't think it will have much of an impact on us as Netflix is largely complementary to pay TV packages", the report read.

"The model works from a consumer perspective because it is such a good value", Pachter said.

"We definitely have YouTube envy", Hastings said.

Hastings also addressed the issue of market saturation, citing YouTube's announcement in February about users racking up more than 1 billion hours of video viewing every day. "At that point, Netflix might disrupt itself again, as it's done throughout its history with innovations such as DVDs by mail, subscription monetization, digital streaming and original content".

Netflix subscriber base was set to exceed 100 million global subscribers soon. For the $1bn it plans to spend on marketing, about 600% of that will be spent on content.

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