Netflix just kicked off a tech earnings season in a big way.
The movie and TV streaming service said that it added 400,000 subscribers in the US and 3.2 million subscribers abroad in the third quarter of this year. These numbers soundly beat Netflix’s own forecast of 300,000 domestic subscribers and 2 million subscribers internationally, and that’s making Wall Street very happy.
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When it comes to Netflix, subscriber additions are the main number that investors pay attention to. In after-hours trading, Netflix stock is trading up by about 20 percent, to just below $120 a share, adding nearly $9 billion to the company’s market value.
Reed Hastings beats his Q3 numbers, hands out promising Q4 numbers. Stock is up 19%. https://t.co/cQ2nnw2Ol2
— Peter Kafka (@pkafka) October 17, 2016
Today’s results are a big surprise to Netflix analysts and industry experts.
The Wall Street Journal called Netflix’s last earnings report a “horror show,” and the company owes billions of dollars — $14.4 billion total — for all the expensive TV and film rights it has picked up over the past few years.
And while subscriber additions are great, it doesn’t mean Netflix won’t raise your rates, probably sooner than later. Some argue a fee increase is inevitable if Netflix plans to keep churning out big-budget productions like “Luke Cage” or “House of Cards,” especially when HBO keeps upping the ante with big-budget productions like “Westworld,” which cost a reported $100 million for the first 10 episodes.
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