Looks like our TV addiction is proving advantageous for streaming giant Netflix, as the company added 2 million more subscribers than Wall Street expected in the final three months of 2017.
Netflix turned a DVD-by-mail business into an online competitor of movie channel HBO. As it grew it began licensing its own original shows to ensure a stream of new offerings if studio suppliers ended deals.
“We believe our big investments in content are paying off,” Netflix said in a quarterly letter to shareholders.
These exceptional and extraordinary financial results have driven Netflix to a market capitalization of over $100 Billion for the first time. The company’s shares jumped by 9% to over $248 in after-hours trading on Monday. The shares were rallying throughout the month and have risen by 53% last year.
“Netflix is pouring more and more money into making content, and it is directly translating into more subscribers,” BTIG analyst Richard Greenfield said. “They see a huge opportunity and they are moving as fast as they can to attack it.”
The company also said it took a non-cash charge of $39 Million for “unreleased content we’ve decided not to move forward with.” A source familiar with the matter said the charge was related to content starring Kevin Spacey, with whom Netflix cut ties after he was accused of sexual misconduct. Netflix temporarily halted production of “House of Cards” to write out Spacey’s character and decided not to release the film “Gore,” which starred Spacey as Gore Vidal, in order to show disapproval of such actions. Spacey has apologized to one of his accusers, and according to his representatives is seeking unspecified treatment. The charge is one of the first signs of costs faced by companies in the wake of a widespread campaign against sexual harassment.