The last quarter of 2017 was more than perfect for Netflix as the company gained 2 million more new subscribers than Wall Street had expected. Netflix valuation is now capped at a whopping $100 billion as the service continues spectacular growth in the international market and in the United States. Looks like all that investment into content is working and Netflix has no plans on slowing down either.
Netflix valuation may continue to grow rapidly in 2018 as well since the company plans to invest another $8 billion on content this year alone. Shares rose 9 percent on Monday during after hours trading and went up to $248. The company has witnessed a 53% rise in share prices alone in 2017.
“Netflix is pouring more and more money into making content, and it is directly translating into more subscribers,” BTIG analyst Richard Greenfield said, according to Reuters. “They see a huge opportunity and they are moving as fast as they can to attack it.”
From just October through till the end of December of 2017, Netflix gained nearly 6.5 million new subscribers from international markets alone. New seasons of highly acclaimed shows such as “Stranger Things” and bigger budget movies like Will Smith’s “Bright” have caught the eyes of fans everywhere.
“We believe our big investments in content are paying off,” the company said. “Big hits like 13 Reasons Why, Stranger Things and Bright result from a combination of great content and great marketing … we want great content, and we want the budget to make the hits we have really big, to drive our membership growth.”
Nearly 2 million subscribers were added on in the United States during that time. The total number of Netflix subscribers around the globe is now close to 118 million. Wall Street had expectations of only 5.1 million, according to reports.
In total, 24 million new subscribers jumped on to the Netflix bandwagon last year. This amazing rise of paying subscribers has pushed Netflix valuation at $100 billion.
Kevin Spacey Like Controversies Also Cost Netflix
$39 million was also invested and lost by Netflix in a sense that the company decided not to move forward with certain “unreleased content”. Sources are saying that Kevin Spacey and a number of other controversies involving big name actors forced Netflix to part ways with the stars and the content which had been invested in.
2017 was also the first year that Netflix had a full-year profit in international markets. Netflix is still burning cash fast, but investors are happy at the new prospects up ahead. Netflix valuation was expected to drop after these controversies, but if 2017 tells us a story about Netflix’s strategy and its affect, then 2018 may just be an even better year for it.
“Consumers are tolerant as long as something’s improving,” Netflix CEO Reed Hastings, during a webcast, of both issues Netflix has faced and of recent price increases.
What do you think about the Netflix valuation at $100 billion? Will Netflix continue to get better and improve content in 2018? Let us know in the comments section below.