Netflix enjoys Bright end to 2017 as subscribers surge
Staff Reporter | On 23, Jan 2018
Netflix enjoyed a Bright end to 2017, as the streaming giant saw its number of subscribers surge.
Netflix added a whopping 24 million new memberships last year as whole, boosting its streaming revenue by 36 per cent year-on-year to pass the $11 billion barrier. This is at a faster pace than the 19 million subscribers added in 2016. It was fuelled by a strong end to the year, with 8.3 million net additions in the fourth quarter of 2017, its highest quarter ever and up 18 per cent from the same record-setting period in 2016. In the US, the number of subcribers rose 2 million, while internationally, 6.36 million subscribers were added, both above the expected numbers of 1.25 million and 5.05 million.
Engagement with content grew too, with the average streaming hours per membership growing by 9 per cent year-over-year.
CEO Reed Hastings attributes the growth to its high-performing original content, with 13 Reasons Why, Stranger Things and Bright all proving very popular. Netflix has upped its marketing budget in the last year, and will be taking its marketing spend up faster than revenue for 2018 (from about $1.3 billion to approximately $2 billion), as it seeks to build more word-of-mouth hype. Indeed, Hastings claimed that critics who gave Bright negative reviews are “pretty disconnected from the mass appeal”, with the fantasy blockbuster becoming one of Netflix’ most viewed original titles ever (a sequel is already on the way).
“Critics are an important part of the artistic process but are pretty disconnected from the commercial prospects of a film,” he added in a recorded conversation to go alongside Netflix’s results announcement. “If people are watching this movie and loving it, that’s the measurement of success.”
Many would argue, of course, that the definition of success also stems from audiences enjoying what they watch: Netflix’s viewing stats notably don’t include the number of people who only watched part of the film, or stopped after 10 minutes. (You can ready our even-handed, broadly positive review of Bright here.)
Netflix plans to up its spending on original films this year, as well as on bigger films – it will be spending between $7.5 billion and $8 billion on content on a P&L basis in 2018. That includes over 30 international original series this year, including projects from France, Poland, India, Korea and Japan, as Netflix seeks to broaden its horizons.
All this occurs as Disney prepares to launch its own streaming platform in 2019 – what is expected to be an expanded rollout of its existing VOD service, DisneyLife – bolstered by the acquisition of 21st Century Fox and its large library of content.
Netflix, though, is unconcerned about the competition.
The market for entertainment time is vast and can support many successful services,” says Hastings. “In addition, entertainment services are often complementary given their unique content offerings. We believe this is largely why both we and Hulu have been able to succeed and grow.”
Netflix’s confidence appears well founded: this last year saw the streaming giant halt its new season of House of Cards and start again from scratch without Kevin Spacey, after multiple allegations of sexual harassment and abuse were launched against the actor. It also scrapped a Gore Vidal biopic that was in production. Netflix took a $39 million hit in the fourth quarter of 2017 for “unreleased content we’ve decided not to move forward with”, noted Hastings. With its numbers still pointing upwards, though, the streaming service looks set to enjoy an equally Bright 2018.