LOS GATOS, CA – Netflix credited “excitement” around its original content for a third quarter surge in subscribers, as the streaming service saw its quarterly global streaming revenue jump 36% to exceeded $2 billion for the first time.
In a note to shareholders that included the company’s financial results, Netflix said that it added 3.57 million subscribers in the period, including 370,000 in the U.S. and 3.2 million internationally, ahead of its internal forecasts. Netflix now has 86.7 million subscribers worldwide
Citing the success of original shows such as Stranger Things and Narcos, Netflix pledged to expand its content budget to approximately $6 billion in 2017.
“We are now in the fourth year of our original content strategy and are pleased with our progress”, reads the note. “In 2017, we intend to release over 1,000 hours of premium original programming, up from over 600 hours this year. The Internet allows us to reach audiences all over the world and, with a growing base of over 86 million members, there’s a large appetite for entertainment and a diversity of tastes to satisfy.”
Netflix added that while it still hopes to launch in China eventually, its near term plan is to license content to existing online service providers, given the “challenging” regulatory environment for foreign digital content services in that country. “We expect revenue from this licensing will be modest”, continues the shareholder note.
Revenues for the quarter were $2.29 billion, up from $1.74 billion during the same period in 2015, while net income of $51.5 million jumped from the $29.4 million reported for the same period a year earlier.
“…(F)or the balance of 2016, we will continue to operate around break even, and then start generating material global profits in 2017 and beyond, by marching up operating margins steadily for many years.”
