Netflix has reported (10/21) a big paid subscriber leap in the US that now puts the streaming service ahead of Time Warner’s HBO, according to analyst estimates. Original titles such as Orange is the New Black and its Emmy-winning House of Cards were big attractions for subscribers.
Netflix’s U.S. paid subscribers jumped to 29.9 million in the third quarter, up from 28.6 million in June, passing HBO’s 28.7 million, according to market researcher SNL Kagan.
“Binge viewing” of such series titles have turned Netflix into a hits maker for a new generation, noted a USA Today story.
“We went to a second season of Orange Is the New Black early because we had seen all 13 episodes (and) were highly confident in the forecast models and the quality of the show,” Netflix Chief Content Officer Ted Sarandos said on a conference call.
“I think Orange was a great success for us,” Netflix CEO and founder Reed Hastings added. “We’re trying to do more great content like Orange.”
Wall Street applauded Netflix’s programming results. Shares of Netflix rocketed 10%, at $391.39, in after-hours trading on the news.
Membership at Netflix soared in the quarter from a year ago. Netflix reported a more than 33% jump in members from a year ago, at 40 million compared with less than 30 million in the prior period.
Netflix quarterly results beat estimates, according to a survey of forecasts from Thomson Reuters. Company net income popped 315%, at $31.8 million, compared with a year ago. Revenue nudged past estimates by $6 million on just over $1.1 billion in the quarter. Earnings per share of 52 cents beat analyst forecasts for 49 cents in the period.
RBR-TVBR observation: These numbers are congruent with cord-cutting and consumers’ scaling back on premium MVPD packages to save money. The company has come a long way. Back in 2011, Netflix raised $400 million as part of an effort to recover from a customer backlash that battered its stock. The crisis was triggered by its decision that customers who want streaming and DVDs would have to pay $7.99 a month for each service, a 60% increase for people who previously got both. The result was subscribers started to abandon Netflix en masse. They have certainly turned the ship around.