Two interesting tidbits from Netflix in their quarterly earnings report:
1. For the first time, they have more international subscribers than U.S.
subscribers.
2. Morgan Stanley, which raised its price target to $210, noted that Netflix’s
original content has encouraged more pay-TV companies to incorporate the
streaming service into their plans.
This tends to confirm my position that the MVPDs have no incentive to block
Netflix, or to slow it down; they do have the incentive to work with Netflix to
integrate the service with their own pay-TV bundles, as they have done for
decades with HBO, ShowTime, and Starz.
The strong growth in International subscribers may be a silver lining in the
growing cloud related to licensing episodic TV series from the big content
congloms. While the congloms can use their own OTT services like Hulu to offer
this content in the U.S., they may look on international distribution more
favorably. They do license these shows to international broadcasters, but may
be less concerned about Netflix competing with them outside the U.S.
Regards
Craig
http://www.foxbusiness.com/markets/2017/07/18/netflix-hits-record-high-on-subscriber-surge.html
Netflix hits record high on subscriber surge
Matthew RoccoPublished July 18, 2017
Netflix shares jumped to record highs on Tuesday after revealing a surge in new
subscribers to the streaming video service.
Netflix widely beat Wall Street expectations when it reported an increase of
5.2 million global customers in the second quarter. Analysts were looking for a
smaller gain of 3.2 million new subscribers.
Shares rallied 10% to $177.93 in recent trading. Netflix climbed as high as
$177.98 a share, soaring above its previous all-time high of $166.87 set on
June 8.
By the end of June, Netflix had 52.03 million subscribers outside the U.S. and
52.92 million in its home market. It was the first time that Netflix had more
international customers. The company also said it now expects to log its
first-ever annual profit in non-U.S. markets.
Netflix anticipates adding 3.65 million international subscribers in the
current quarter. Wall Street had projected a 3.2 million increase.
The Los Gatos, California-based company has spent heavily on original shows to
attract new subscribers, finding success with hit shows such as “House of
Cards.” Netflix has been in a race with Amazon.com’s Prime Video, which has
also invested in a growing lineup of exclusive programming like “The Grand
Tour.”
Morgan Stanley, which raised its price target to $210, noted that Netflix’s
original content has encouraged more pay-TV companies to incorporate the
streaming service into their plans.
“The 2Q results and 3Q guidance support the view that more recently launched
international markets are accelerating in the pace of net [subscriber
additions], as demand for Netflix’s service benefits from its rising exclusive
content offering,” Morgan Stanley analysts wrote in a note to clients.
