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Netflix valuation crosses US$100B

By: Graphic Business
Netflix is amking gradual inroads in the ICT sector
Netflix is amking gradual inroads in the ICT sector

Netflix earned a market capitalisation of more than US$100 billion for the first time as record-high net subscriber additions fuelled strong growth in net income in the final quarter of 2017.

The video streaming service added 8.3 million subscribers during the quarter, bringing its total to 117 million. In a letter to shareholders, it said the subscriber growth was the highest in its history and up 18 per cent on a “record” Q4 2016, when it added 7.05 million.

Netflix noted Q4 2017 net additions exceeded its forecast of 6.3 million “due primarily to stronger than expected acquisition fuelled by our original content slate and the ongoing global adoption of internet entertainment.”

Its total net income was US$186 million, up from US$67 million in Q4 2016, while its total streaming revenue (not including its DVD business) was US$3 billion, compared to US$2.4 billion in the 2016 quarter. Streaming revenue for all of 2017 was US$11 billion.

External factors
Netflix admitted it “took a US$39 million non-cash charge in Q4 for unreleased content we’ve decided not to move forward with.” Reuters reported the comment referred to a controversy around actor Kevin Spacey, who played the lead character on a popular Netflix show, as well as an original movie the company decided not to release.

The company has now signed up more than half of all US broadband households to its service, Reuters added.

In its shareholder letter, Netflix said: “We had a beautiful Q4, completing a great year as internet TV expands globally” adding it plans to continue investing in original content.

While Netflix doesn’t reveal metrics around its mobile app, Paolo Pescatore, VP of multiplay and media at CCS Insight, said telco partnerships will be key for further subscriber growth over the next 12 months.

“As many local providers and operators strengthen their video services, the competitive environment continues to intensify. Netflix will face stiffer competition as rivals launch live TV services and move into sports rights,” he said.

A new Sensor Tower report concluded Netflix was 2017’s top subscription-based app on iOS.-MobileWorld/GB