Yesterday, Netflix held their Q3 quarterly earnings call. Here are the Top 10 things you should know:
1. Over $2B in Streaming Revenue: For the first time they crossed over the $2B mark in quarterly streaming revenue. Domestic streaming was $1.3B, an 8% increase from the previous quarter and up 23% YoY. International streaming revenue of $.853B was 40% of the total, and 13% higher from Q2 and an impressive 65% growth YoY.
2. Added 3.6MM Streaming Subs Globally: The total global count stands at 86.7MM. Domestically, streaming subs increased 0.368MM, or only +1%, to 47.5MM. Internationally, they grew subs by 3.2MM, or +9%, to 39.2MM.
3. New Originals Spurred Sub Growth: Touted their new originals such as Stranger Things (which they produced and own), Narcos Season 2, The Get Down and Marvel’s Luke Cage as being the reason for their impressive subscriber growth, both domestic and international.
4. 1,000 hours of Original Programming in 2017: They made a splash back in January when they said they’d have 600 hours of original programming in 2016. Well they outdid themselves by claiming they will have nearly double that for next year.
5. $6B Content Budget for 2017: This number was so large I kept it out of #4 – it deserved it’s own call out. Unfortunately it comes at a cost. They reported -$506MM in cash flow, compared to -$254MM in Q2 2016.
6. 9 Emmy Wins: Primetime Emmys – Bloodline (1), Master of None (1), Patton Oswalt: Talking for Clapping (1); Creative Categories – Making a Murderer (4), Jessica Jones (1), What Happened, Miss Simone? (1)
7. Integration with Cable Set Top Boxes: Friend or foe, the cable companies are now willing to work with Netflix. Comcast Xfinity, the largest US cable operator, will incorporate Netflix into their X1 user interface. Netflix content will appear on the channel guide, just like any other network or TV show. In September, they signed a similar deal with Liberty Global, the world’s largest international cable TV and broadband company, which will lead to Netflix’s content being made available to Liberty Global video customers across more than 30 countries around the world.
8. No Service in China: After years of trying to break into the Chinese market with their own service, Netflix will instead license content to existing online service providers there.
9. Ungrandfathering is 75% Complete: Earlier in the year they announced a $1 bump in price. This led to higher than normal churn. Now that only older generation devices remain, which is a small amount, there should be little to no impact going forward.
10. $1.3B In Cash: Finished the quarter with over one and a quarter billion in cash and equivalents. They plan to raise additional debt in the coming weeks.