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Netflix Nears a Major Milestone

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Editor’s Remarks
Netflix’s latest figures show that it’s on the brink of a major milestone, with its global subscribers totalling almost 100 million. But despite the impressive figure, the world’s leading video streaming service reported some disappointments in its first quarter earnings. It added fewer new subscribers than expected (reaching 98.75 million rather than the 98.83 million forecasted by FactSet) and, importantly for shareholders, its forward earnings guidance came in at 15 cents per share, far lower than the 24 cents per share forecasted by Thomson Reuters. Netflix will, naturally, celebrate its 100 millionth member – expected to arrive as early as this weekend – but it had hoped to welcome him or her into its hallowed halls of box set binging a fair bit earlier. 5 million new subscribers in one quarter beats a great many other streaming subscription services (nearest competitor Amazon Prime doesn’t release its exact figures), but it’s not good enough for Netflix. Still, it has reasons to be cheerful: its earnings per share beat expectation, and revenue is steady at $2.64bn. And, importantly, it is now more global than ever. As recently as 2014, less than a third of its then 57.4m subscribers were outside of the US, but this proportion now stands at 49%. Now available in over a hundred countries, Netflix’s number of international subscribers is expected to overtake its domestic customer base this year. (edited)

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