Do Netflix Results Reflect Future Expectations?
Netflix has been on a good run backed up by growth in consumer subscription. Netflix Results show the number of subscribers keeps growing by the day surpassing even the entities own expectations.
The firm today confirmed that it now has over 5 million new subscribers. The bulk of the subscription comes from the international market, with 850,000 coming from the U.S alone.The reason for the drive has primarily been due to the rise in spending in a bid to create original content. This move looks to be paying off big time.
Slow U.S growth
However, it is not going to be a bed of roses for the company. There is an expectation that US subscription will be lower than it was the same time last year. The recent hiking of viewership fees is the likely cause for the lag in U.S. The bone of contention is finding a way to push market value in the midst of burgeoning production costs.
Revenue figures came in slightly higher than wall street's speculation. Though the firm remains committed to satisfying customers, the biggest worry lies in whether the entity will keep up momentum in sales figures. Netflix intends to spend roughly $7 billion of budget funds on innovative content next year.
Though revenue from viewership fees is crucial, what matters most is subscription numbers. A large subscription base translates to healthy looking profit and loss statement. The entity will have to figure out what excites their clients most to have any chance of meeting set targets. Netflix stocks have been on an upward trend but the question of U.S growth still lingers.
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