Navigation
Suscribe
Menu Search Facebook Twitter
Search Close
Menu ALL SECTIONS
  • Capital Coahuila
  • Capital Hidalgo
  • Capital Jalisco
  • Capital Morelos
  • Capital Oaxaca
  • Capital Puebla
  • Capital Quintana Roo
  • Capital Querétaro
  • Capital Veracruz
  • Capital México
  • Capital Michoacán
  • Capital Mujer
  • Reporte Índigo
  • Estadio Deportes
  • The News
  • Efekto
  • Diario DF
  • Capital Edo. de Méx.
  • Green TV
  • Revista Cambio
Radio Capital
Pirata FM
Capital Máxima
Capital FM
Digital
Prensa
Radio
TV
X
Newsletter
Facebook Twitter
X Welcome! Subscribe to our newsletter and receive news, data, statistical and exclusive promotions for subscribers
Business

Netflix on the Verge of Hitting 100 Million Subscribers

The company will reach that milestone this weekend if its projections are correct

Official photo of the Netflix logo, photo: Wikimedia
3 months ago

SAN FRANCISCO – Netflix is on the verge of surpassing 100 million global subscribers, a testament to how much the video streaming service has changed the entertainment landscape since its debut a decade ago.

The company will reach that milestone this weekend if its projections are correct. Netflix made the prediction Monday with the release of its first-quarter earnings.

The service added nearly 5 million subscribers during the first three months of the year, and will end March with 98.7 million customers in roughly 190 countries.

THANK THE SMARTPHONE

Over the past decade, “what really did it for Netflix was the explosion of phones and tablets that allowed people to watch video everywhere,” said Wedbush Securities analyst Michael Pachter. “But Netflix clearly had a vision before those devices became so ubiquitous.”

About 51 million of Netflix’s subscribers are in the U.S. By the end of this year, Piper Jaffray analyst Michael Olson expects the majority of the company’s subscribers to be overseas. Netflix ended March with nearly 48 million subscribers outside the U.S.

Netflix CEO Reed Hastings called the 100 million subscriber mark “a good start” in a letter reviewing the company’s first-quarter results.

The understated reaction reflects Hastings’ ambition to build the world’s largest video channel. The company’s progress toward reaching that goal has helped drive Netflix’s stock price progressively higher during the past five years, a stretch that has seen the video service add 72 million more subscribers.

Netflix currently has a market value of about $63 billion. Its stock rose $1.67 to $148.92 in Monday’s extended trading, even though subscriber growth during the first quarter came in slightly below management forecasts.

Netflix on a tablet, Tuesday, Jan. 17, 2017, in North Andover, Massachusetts. Photo: AP/Elise Amendola

STILL CHASING HBO

For all its success, Netflix still has a ways to go to catch up with HBO, the popular pay-TV channel that has served as its role model. HBO has 134 million subscribers worldwide, including viewers paying for an internet-only version of the channel that was inspired by Netflix’s success.

Other cable channels also are offering internet-only options as more viewers, especially younger people, eschew traditional TV packages and subscribe to streaming services instead.

The trend has confronted Netflix with more competition in the battle for household entertainment budgets. Netflix so far has answered the challenge by spending heavily on original shows such as “Stranger Things” and “House of Cards” and selling its service at a relatively low price. Netflix’s subscriptions range from $8 to $12 per month, with the most popular option at $10.

“The model works from a consumer perspective because it is such a good value,” Pachter said.

WILL NETFLIX RAISE PRICES?

But Pachter and other analysts wonder how long Netflix will be able to hold the line on price as its programming costs rise in tandem with its appeal to a more diverse international audience. Movie and TV studios typically also demand more money as more people subscribe to channels to in an effort to make as much as possible off their content.

As it is, Netflix expects to spend about $6 billion on programming this year.

Netflix hasn’t given any inkling it will raise prices again. It lost some long-time U.S. subscribers after their rates went up by as much as $2 per month last year. Netflix had previously frozen prices for millions of subscribers at 2014 levels.

But if it wants to keep investors happy, the company will eventually have to improve its relatively low profit margin. The Los Gatos, California, company earned $178 million on revenue of $2.6 billion in the first quarter. Analysts predict Netflix will make $482 million on revenue of more than $11 billion for the entire year.

A costly international expansion has depressed Netflix’s profits. Netflix had piled up $1.5 billion in operating losses on its international operations until the first quarter, when its streaming service outside the U.S. posted an operating profit of $43 million. But the company expects to lose another $28 million internationally in the current quarter.

MICHAEL LIEDTKE

Comments Whatsapp Twitter Facebook Share
More From The News
Sports

Earnhardt Backs Wife, Blames Himself for ...

59 mins ago
Sports

Grace Sets Major Championship Record Wit ...

2 hours ago
Business

Ford Says it Will Fight Latest Takata Re ...

4 hours ago
World

Turkey Reissues Warrant for 4 Activists ...

6 hours ago
Most Popular

Mexico Announces New Laptop, Tablet Secu ...

By The Associated Press
Mexico

Mexico City Sees Drug-War-Style Violence ...

By The Associated Press
Mexico

Possible Melted Fuel Seen for First Time ...

By The Associated Press
World

UAEM to Open More Schools in Outmost Reg ...

By The News
Mexico

Exhumation of Dalí's Remains Finds his M ...

By The Associated Press
World