Reed Hastings - H 2015
AP ImagesNetflix CEO Reed Hastings rolled out financial results that impressed Wall Street, and used the opportunity to take another swipe at NBC.
Hastings announced in a letter to shareholders on Tuesday that Netflix added 5.6 million members worldwide during the fourth quarter. The streaming service then passed the 75 million-subscriber mark right after New Years.
The result: Netflix users streamed 42.5 billion hours of programs and movies in 2015. And Hastings used the performance to tweak NBC’s president of research and development, who last week said streaming was overblown and that the big networks was “TV like God intended.”
“Our investors are not as sure of God’s intentions for TV, and instead think that Internet TV is a fundamentally better entertainment experience that will gain share for many years,” he wrote. “The challenge for traditional media companies, most of whom see the future pretty clearly, is to use the revenue from Netflix and other SVOD services to fund both great content and their own evolution into Internet TV networks.”
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The quip followed a robust earnings period for Netflix during the last three months of last year. The company reported a profit of $43 million, or 10 cents a share, on revenue of $1.67 billion.
The results easily sailed past Wall Street projections, but was sharply lower from the year-ago period. Netflix has been spending serious cash each quarter as part of an international expansion, which has cost the company about $109 million during the quarter.
Netflix shares catapulted higher in after-hours trading, with the stock up 9 percent after closing the regular session higher at $107.89. Netflix was the best-performing stock in the broad S&P 500 last year after it more than doubled in price.
Hastings earlier this month announced that the service would be available in 130 new countries, which basically encompassed the world except. Netflix is still not available in China, where Hastings said executives are in the process of “building relationships” that could help them launch there by year’s end.
One area that saw somewhat of a slowdown in the U.S., where Netflix ended the quarter with almost 45 million subscribers. Hastings acknowledged that growth was “harder than in the past,” attributing it to already high penetration
The CEO and co-founder also disclosed that Adam Sandler’s first Netflix original movie, The Ridiculous Six, was the most-viewed movie on the service in every territory the week of its debut, and it was the most-viewed movie ever on Netflix in its first 30 days available.
In the fourth quarter “we launched an unprecedented number of original series and films, while maintaining a high bar on quality,” Hastings wrote in his letter, and he said Netflix will launch more than 600 hours of original programming this year, up from 450 hours in 2015.
“Increasingly, our goal is to own more of our original programming to allow for greater creative business control and to ensure global access to content,” wrote Hastings. “We are currently actively managing productions spanning the globe from Cambodia to Venice Beach.”
Email: Paul.Bond@THR.com
