Netflix viewers may like to chill, but Netflix itself is still hot — the streaming service has just reached 125 million subscribers. The milestone was announced on Monday, April 16 during the company’s first quarterly earnings call of 2018, whereupon the company revealed that it had added 7.4 million subscribers in the first quarter of the year.
This represents a 50-percent increase in new subscribers from the same quarter last year, and outpaced analyst expectations. As Daniel Ives, an analyst with GBH Insights, wrote in an investor note, the results are “eye popping.”
Netflix’s growth is particularly noteworthy against a background of other struggling tech companies, who are facing increased scrutiny of how they’re using their users’ data. Netflix, on the other hand, is simply providing entertainment to its customers. Producing this content involves quite a cost, though. The streaming service has pledged to produce no fewer than 700 original TV shows, movies, and specials this year. The associated price tag? A whopping $8 billion.
But it’s not just original content that is helping Netflix’s growth. Rather, the company’s burgeoning subscriber numbers come largely from overseas — indeed, the majority of new subscribers in the first three months of 2018, nearly 5.5 million, are from countries outside of the U.S. As Ives wrote, “It shows the company’s aggressive international expansion strategy is bearing fruit and putting major fuel in the company’s growth engine for the rest of 2018 and beyond.”
This impressive growth has surprised even Netflix’s own executive team, who noted on a conference call with analysts that they did not fully anticipate these levels of success.
“We’ve outperformed the business in a way we didn’t predict,” David Wells, Netflix’s CFO, said on Monday. “The business has grown faster than we expected.”
And it doesn’t seem as though Netflix will be slowing down anytime soon. In the next quarter, the company hopes to add another 6.2 million subscribers. If these estimates prove to be correct, this will once again outpace analyst expectations.
That said, Netflix hasn’t cemented its position as the reigning monarch of the streaming industry quite yet. As CNN notes, Apple is looking to make big investments in its own original content, while Amazon is said to be looking to spend as much as $1 billion on just one TV show. Still, it’ll likely be a while yet before we start replacing the phrase “Netflix and chill” with “HBO Go and chill.” Really, it just doesn’t roll off the tongue as easily.
