Netflix could surpass 100 million subscribers by the end of this week

Reed Hastings

Shares of Netflix fell 2.3 percent to $143.80 in extended trading after results were announced.

Netflix announced a year ago that it was going to invest $6 billion into developing original series and movies with the goal to make about 50 percent of its content original.

Netflix expects to pass the 100 million user mark this coming weekend, an important milestone but "nowhere near as big as YouTube", Hasting said during a post-earnings interview with analysts yesterday. The company said it expects to top 100 million this weekend. Netflix's subscriptions range from $8 to $12 per month, with the most popular option at $10. Revenue was projected to increase 35 percent year over year to $2.64 billion in the first quarter. Because of those expenses, Netflix said profit in the period will be 15 cents a share, short of analysts' estimate of 23 cents.

Most of this growth is coming from global markets, with a net addition of 3.5 million in during the period. The actual figure turned out to be 4.95 million additional subscribers, which is really nothing to sneeze at. Group net profit lifted to United States dollars 178 million from 28 million, with an operating margin advancing to 9.7 percent from 2.5 percent.

The trend has confronted Netflix with more competition in the battle for household entertainment budgets. However, Netflix did provide upbeat guidance for second quarter subscriber additions at 3.2 million, well above the 2.54 million subscribers analysts were expecting. "We see that the Internet is just a phenomenal opportunity, of course, we're pay service, not ad-supported", he pointed out. It is also testament to how the streaming service, around since 2007, has forever altered audiences' expectations in the United States and overseas, as Netflix has turned video on-demand across devices - on televisions, tablets, and smartphones - into a prerequisite, not a bonus, that upstart streaming services and conventional cable operators must live up to.

"That is not a strategy that we think is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows", Netflix said.

Hastings said that the global march of Netflix is continuing in Latin America Europe and North America as well as Asia, the Middle East and Africa.

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