The offer from Netflix until a few years ago, mainly from assets that were previously seen elsewhere: the films that were long gone from the cinemas, or older seasons of TV series. At the time of submission of its quarterly numbers on Thursday after the market close of the Online video service, but made so clearly as never before that his strategy has changed completely.
economic correspondent in New York.
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In a letter to shareholders he wrote, his focus was always less on the secondary exploitation of content, but on the fabrics, which allows the company to produce to provide his subscribers exclusive.
First, especially TV series like “House of Cards” or “Stranger Things”, increasingly offers Netflix but also his own films. And the company said it had a series with these films gradually similar success as with the TV. Against his other habits, it published figures, even spectators, to underline this. Shortly before Christmas come out of the Film “Bird Box” with Sandra Bullock was considered to be in the first four weeks in more than 80 million households.
More customers than expected
Netflix has removed himself so far from his beginning as a sales channel, and now resembles more and more a Hollywood Studio. And the strategy pays off, apparently. Because the company has gained in the past quarter, significantly more customers than it had said this three months ago before. The number of subscribers is increased instead of the projected 7.6 million to 8.8 million to 139 million.
Better than expected especially in the regions outside of the American home market, where Netflix won 7.3 million additional customers. The Figures take into account only the number of the end customer, so no free trial subscriptions. For the first quarter, Netflix predicted even a growth in customer numbers by 8.9 million, which was above the expectations of analysts.
The stock market showed, nevertheless, not very impressed. The share price fell in after-hours trading at one time, more than four percent. The bar had, of course, also high, because the Netflix stock has gained in the recent period to a considerable value. Since Christmas, the rate has risen by more than 50 percent.
Beyond the much-publicized subscriber numbers, there were also some indicators in the quarterly report, which could explain the cautious reaction of the stock market. The turnover of 4.2 billion dollars, an increase of 27 percent compared to the previous year, was minimal under the forecasts of analysts. The earnings per share of 30 cents to six cents higher than expected, however, the entire net profit fell because of higher costs and higher taxes from 185 million to $ 133 million. Also missed the forecasts for sales and profit in the first quarter of the expectations.
NETFLIX INC. DL-,001 — — (–) NASDAQ London tradegate exchange Xetra lang & Schwarz in Frankfurt, Stuttgart, Vienna Switzerland Switzerland 1T 1W 3M 1J 3J 5J For detail view
The strategy is to focus on their own content, while apparently a lot of customers, but it is also hugely expensive. Even if the company is profitable, shows there is a negative cash inflow (Free Cash Flow), so that’s more money than, for example, via subscriber fees will be taken. Just for the title of your own costs, often long before the release– and also, before you appear in the profit and loss account.