UK Edition
Netflix to continue spending spree on content after record subscriber growth
Netflix netted its best third quarter on record for subscriber growth as it said it will continue to pump more money into its original programming to ward off growing competition in the market.
The streaming service added 5.3 million subscribers in the three month period, a 49pc increase from last year and ahead of its guidance for 4.4 million subscribers, thanks to better-than-expected growth in both the US and internationally.
Its revenue rose 30pc to $2.99bn (£2.26bn) compared to a year earlier, and its net income more than doubled to $130m.
This growth came as Netflix continued to burn through cash to develop new programmes, saying its future "largely lies in exclusive original content".
The service has been behind award-winning shows such as Orange is the New Black, House of Cards and The Crown, and in the recently-ended quarter launched several new series including Marvel's The Defenders.
Netflix said it expects to spend between $7bn and $8bn on content next year, up to $1bn ahead of earlier forecasts, and more than the $6bn it is paying for content this year and $5bn it paid in 2016.
Analysts estimate Amazon's budget for its Prime Video service, meanwhile, is around $4.5bn, and Apple is said to be planning to spend around $1bn on original content.
Netflix said it had been expecting a shift from TV to internet entertainment and "recently, it's been unfolding right before our eyes".
To offset growing spend on content, Netflix is putting through price rises for its premium packages in the US and UK, which it said is likely to mean its fourth quarter subscriber growth falls year on year, forecasting 6.3 million adds compared to 7.05 million last year.
However, this remains above Wall Street expectations and stock soared to new record highs on the results, up 1.8pc in after-hours trading.