Will spend up to US$8 billion this year on content
LOS GATOS, Calif. – Pronouncing it “beautiful”, Netflix’s fourth quarter capped off a 2017 which saw a 36% total increase in streaming revenue to over US$11 billion on the year – adding 24 million new memberships (compared to 19 million in 2016).
Netflix added 8.3 million new streaming subscribers in the fourth quarter, ended December 31, 2017, the highest quarter in its history and up 18% versus 2016. “This exceeded our 6.3m forecast due primarily to stronger than expected acquisition fueled by our original content slate and the ongoing global adoption of internet entertainment. Geographically, the outperformance vs. guidance was broad-based,” says the company’s letter to shareholders.
In the U.S. alone, memberships rose by 5.3 million on the year to 52.8 million. The company does no break out subscriber numbers for any other country.
In the first quarter of 2018, Netflix is projecting global net subscriber additions of 6.35 million (vs. 5 million in the year ago quarter), with 1.45 million coming from the U.S.
“As we wrote last quarter, our primary profit metric is operating margin and we are targeting a full year 2018 target of 10%, up about 300 basis points year over year, as in the prior year,” reads its release. “We believe our big investments in content are paying off. In 2017, average streaming hours per membership grew by 9% year-over-year. With greater than expected member growth (resulting in more revenue), we now plan to spend $7.5-$8.0 billion on content on a P&L basis in 2018.”
The company also forecasts a near 40% increase in total revenue in 2018, to $3.7 billion.
