The video-streaming service, Netflix, had exceptional news to deliver to Wall Street. In the fourth quarter of 2017, the entertainment company added 8.3 million new streaming subscribers, exceeding expectations and predictions.
Out of the total number of subscribers that joined the platform, almost two million came from the U.S alone. According to Variety, the company shares closed up 3.2 percent Monday at $227.58 per share. It was an all-time high closing price.
“For Q4, Netflix added 1.98 million U.S. streaming subs and 6.36 million overseas. That was well above the Wall Street forecasts of net adds of 1.28 million streaming subscribers in the U.S. and 5.02 million internationally (roughly in line with Netflix’s previous guidance).”
Netflix’s total revenue in the final quarter of 2017 was $3.29 billion. In spite of raising prices (fees (increased from $9.99 to 10.99), Netflix performed superbly and grew its subscription base.
Thanks to a successful financial quarter, Netflix plans on investing further in marketing efforts. It will be expanding its marketing spending by more than 50 percent in 2018. Specifically, Netflix will raise its budget from $1.3 billion to $2 billion.
The streaming platform is looking to grow further and develop the creation of original content on its video-streaming site.
“Given our track record of content investments helping to increase growth, we are excited about the growth in future years from the increased investments we are making in original content this year,” the company stated.
The company did more than just add subscribers and exceed predictions by Wall Street. As stated by Reuters, It grew its market share and market capitalization.
“The results drove Netflix to a market capitalization of more than $100 billion for the first time. Shares jumped 9 percent to over $248 in after-hours trading on Monday after rallying throughout the month and rising 53 percent last year.”
Netflix added 8.3 million customers in Q4, its biggest growth ever https://t.co/0h1xIf1pYj— Engadget (@engadget) January 22, 2018
Some of the most successful and popular series on Netflix included Stranger Things and The Crown. Furthermore, Will Smith’s movie, Bright, was also popular on the website. All of these recent mentions helped Netflix become a runaway success.
Reuters explained that what had helped the company was investing in making content. In other words, by making investments in creating content, the company’s strategy had paid off since the number of subscribers increased substantially.