Netflix approaches 100 million subscribers

2Q expected to balance out below-average 1Q

Netflix announced that it expects to pass the 100 million subscriber milestone by this weekend, which helped stock to rise slightly. While Amazon and Hulu have continued to up the competition, this number marks how much of a hold Netflix has on the online streaming market still. Netflix also says that it expects a subscriber spike when House of Cards and Orange is the New Black, two of the service’s proprietary programs, return in the second quarter of this year. Mark May of Citi Research makes this observation on the recent revelation: “The disclosure that Netflix is going to pass the 100 million subscriber count this weekend suggests it is trending ahead of schedule towards its sub guidance for 2Q17.” Netflix CEO Reed Hastings put the bar even higher following this release, saying that the company has “YouTube envy, and we’ve got a lot of room to go.” Later in that same conference call, he went back to temper expectations by giving some perspective on the difference between the two services: “YouTube announced they were one billion hours a day, and when we looked it up we’re a little over one billion a week. So we’ve got a long way to go to catch up to YouTube.”

This comes as good news after it was announced last week that revenue had slowed down in the first quarter of 2017. At the time, it had projected 1.5 million domestic customers added, when the final number only ended up being 1.42 million. Analysts attributed that slowdown to the mixed reception Netflix’s newest series have received among television viewers. Iron Fist and 13 Reasons Why, which debuted in the first quarter of the year, have garnered just as many critics as they have earned supporters. A Series of Unfortunate Events and Santa Clarita Diet, while earning a better consensus of reviews among television critics, has focused on more niche audiences, which hasn’t made as much of an impact on Netflix’s bottom line as the company would’ve liked. However, the second quarter’s potential has left investors not too worried about the company’s first quarter.

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