Netflix shares climb on millions of new subscribers

Investing in original programming is paying off for Netflix. Photo / AP

The streaming powerhouse Netflix has cleared more than 100 million subscribers and now counts more of its customers abroad than in the US, the company announced Monday in a better-than-expected earnings report.

Netflix added more than 5 million new subscribers in the second quarter, beating its forecast for both domestic and international customers. Netflix had projected earlier this year that it would add 600,000 new subscribers in the US and another 2.6 million international customers while Wall Street analysts expected similar figures.

The company said its membership grew more than anticipated due to its programming offerings, which included new seasons of "Orange is the New Black" and "House of Cards."

In after-hours trading, the company's stock price climbed as high as US$179.20 or by more than 10 per cent.

Netflix said in a letter to shareholders that the competition for audiences' attention is "intense," but the company described the streaming ecosystem - filled with major players like HBO, Hulu, Amazon and YouTube - as complementary, rather than winner-take-all.

"We are all co-pioneers of internet TV and, together, we are replacing linear TV," Netflix said. "The shift from linear TV to on-demand viewing is so big and there is so much leisure time, many internet TV services will be successful."

Netflix said it added 1.07 million customers domestically and 4.14 million abroad for the second quarter. The majority of Netflix's subscriber base is now found outside of the US, the company said. The Internet TV service is offered in more than 190 countries and in 27 languages.

The company also said that it took in US$2.8 billion in total revenue in the second quarter, up by more than 30 per cent from the same period last year, and it projects roughly US$3b next quarter, another 30 per cent jump from 2016. For Netflix, their rising revenue and subscriber numbers is a sign that investing in original programming is paying off. The company said it expects to see positive momentum carry into next quarter, but added that it had learned not to overshoot it's expectations as it had done in previous quarters. Netflix remains confident, however, that it can continue to expand its subscriber base, especially overseas, where it said it will continue to make significant investments in newer markets.

By the end of the year, the company plans to spend US$6b on original programming and will dole out US$1b to market its library of content. On top of pulling in new customers, Netflix's original shows have drawn industry praise. The streaming service earned 91 nominations for this year's Emmy Awards, second only to HBO, which hauled 111, and well ahead of Hulu's 18 and Amazon's 16 according to Business Insider. Netflix's sci-fi hit "Stranger Things" tied for the second most nominated show, pulling in 18.