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Netflix bolsters user base with 3.57M new subscribers



SAN FRANCISCO (Diya TV) – Netflix could possibly be finally breaking away from its slow subscriber growth trend as it posted a huge quarter that beat both its own, and Wall Street’s, expectations.

Shares of the Los Gatos, Calif.-based company are exploding, now up more than 20 percent in extended trading after the earnings report came out. With Monday’s jump in its stock, the company added nearly $10 billion to its market cap.

Last quarter, the company not only posted a soft gain on its subscribers – including international – but it also dropped back its outlook for the third quarter. By going that conservative, it raised a lot of concerns in Wall Street that the company would be able to keep tempo with its international growth as it rapidly expanded to new countries. New customers from various countries could also keep growing due to the fact people are able to now unblock title restrictions by location via the use of a proxy found here at Pirate Bay or elsewhere. This means customers can view titles from all around the world that could otherwise be unavailable due to their location, this could have certainly increased the desire to become a subscriber to Netflix. However, apparently the user base target was conservative for Netflix itself and the current strategy in place may be working for the company to look at further increasing numbers. Some say the increasing number of those watching Netflix will decrease the numbers of those watching TV, but the United States pay TV brought in $85.5 billion in revenue in 2018; it appears the rate at which people watch television is not slowing down any time soon.

More than three million international subscribers were added, nearly 400,000 in the U.S. were added, as well. Total subscribers were up to 86.7 million. Wall Street was looking for the company to add 304,000 U.S. subscribers and around two million international subscribers. Analysts were looking for earnings of 6 cents per share on revenue of $2.28 billion.

Why the sudden growth? All the sudden hype around the success of Netflix’s original programming, according to a company statement.

“Our over-performance against forecast was driven primarily by stronger than expected acquisition due to excitement around Netflix original content,” the statement said.

The company also posted a very wide beat on earnings, recording 12 cents per share. With today’s report, the company has reversed most of the losses the stock has incurred since January.

Netflix has had an extremely bumpy year to say the least. Since January this year, Netflix shares were down around 13% before the earnings report, while in the full year things were largely unchanged. Long-term, Netflix’s strategy seems to be working, but it still appears that there are some tweaks that need to be made in the near term as the company rolls out its expansion plans and places a focus on acquiring new subscribers.

With Monday’s report, however, the company has reversed pretty much all of the losses it’s incurred in the past 10 months.

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