Netflix reported higher-than-expected revenue and earnings, along with more than 5 million more subscribers, in its third-quarter financial report this week. The video streaming service said in a live-streamed conference on YouTube that revenue hit $2.98 billion and earnings equated to $0.37 per share. Projections compiled by Reuters forecasted $2.97 billion in revenue and earnings of $0.32 per share. Net subscriber additions, meanwhile, reached 5.3 million, well ahead of analysts’ prediction of 4.5 million.
In addition to the encouraging financial results, company executives addressed its prices, the direction of its original movies and shows, departures, and terminations of partnerships with show suppliers in a conference call.
Netflix officials claimed its pricing parameters remained “relative to the value of the content they’re streaming.”
Executives said the company is in no hurry to make significant changes regarding their pricing bracket. Despite criticism from some investors that its prices were too low, the company aims to continue slow, steady growth in content and pricing.
“We’ve tried to maintain that feeling that consumers have that we’re a great value in terms of the amount of content we have relative to the prices,” said co-founder and CEO Reed Hastings.
Chief Content Officer Ted Sarandos, meanwhile, downplayed concerns about partners ending their agreements with Netflix, either to work with rival streaming services or, like Disney, launch their own.
“I think everyone is going to have their own strategies, and it’s exciting that everyone is trying to make over-the-top television better and better,” Sarandos said. “I think that is good for all of us, and we just have to focus on creating content that our members can’t live without and get excited about every month, along with not getting distracted by the competitive landscape around us. Whether or not one of our partners decides to make content for us or compete with us, that’s really a decision they have to make based on their own business.”
Sarandos also did not express concern about any impact from fewer licenses on the amount of original shows and movies offered by Netflix.
“We think it’s great for innovation and consumers to have a lot of choices, and that we just have to be the best choice out there. The environment isn’t a lot different than it is in the television world, where FOX produces for ABC and NBC produces for FOX, so I think those choices are made on a case-by-case basis,” Sarandos said when asked about increased licenses from competitors. “We have long-term agreements with all these players. The shows we have are run of series, so if somebody chooses not to renew a deal, the successful shows with us will ride it out as long as they exist. “The Walking Dead.” for example, the deal with AMC expired two years ago, but the show remains a successful show on Netflix, and will as long as it exists.”
Executives said they do not anticipate a significant shift in the content consumers will see due to those long-term agreements and said the company continues to evaluate its partnerships.
