Netflix shares surge on bumper subscriber figures

Netflix added a record 4.9m subscribers in the first quarter of 2015, lifting the streaming video company's global base above 60m as it rolls out an aggressive expansion of its international footprint and original programming.

The news sent shares up more than 11 per cent in after-hours trading in New York.

The subscriber increase beat Netflix's internal forecast of 4.05m additions and reflected higher than expected growth in the US, to 41.4m members, and internationally, to 20.9m. The company expects to add 2.5m customers in the current quarter.

Netflix's global ambitions were underscored on Wednesday by its announcement of a new partnership with the creators of the BBC'sPlanet Earth for a nature documentary series called Our Planet.

The programme, which will premiere on Netflix in 2019, is a collaboration with the World Wildlife Fund and Silverback Films, the production company led by Alastair Fothergill and Keith Scholey, who created Planet Earth, Frozen Planet and Blue Planet.

"Netflix is clearly focused on replacing linear television with on-demand, ad-free programming on a worldwide basis. The company has begun to not only license content on a worldwide basis, but also create content that has worldwide appeal," said Rich Greenfield, analyst at BTIG Research.

Despite the bumper subscription growth, Netflix took a financial hit in the first quarter from foreign exchange swings and the costs associated with global growth and creating original content.

Net income fell 55 per cent to $23.7m, or 38 cents a share, from $53.1m, or 86 cents a share, a year ago, well below the 60 cents Netflix had projected and analysts' expectations of 69 cents. Stripping out currency losses, earnings per share would have been 77 cents.

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

Losses in the international business widened to $65m from $35m a year ago, as a $15m foreign exchange impact offset subscriber growth.

The company raised $1.5bn in the debt market in February to fund its growth plans, which include substantial investments in original programmes.

Users streamed more than 10bn hours of video in the first quarter, which saw the debut of the third season of House of Cards and the launches of the comedy series Unbreakable Kimmy Schmidt and the drama Bloodline.

"Our original content strategy is playing out as we hoped, driving lots of viewing in an economic way for Netflix while bolstering the positive perception of our brand and service around the world," said Reed Hastings, chief executive, and David Wells, chief financial officer, in a letter to shareholders.

Netflix's surging subscribership comes as the streaming digital market that the company pioneered is seeing a rush of interest from media companies including Time Warner's HBO, technology groups such as Apple, and Dish Network, the pay-TV provider.

Mr Hastings said the proliferation of internet TV was beneficial to Netflix.

"The attention of the new companies is only creating a bigger ecosystem and drawing in more people," he said. "All the internet services are great values in comparison to the big [cable and satellite TV] bundles."

[email protected]

Twitter: @shannonpareil

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation