Netflix Earnings Up as Service Expands

Earnings estimates are better than expected for one media service provider, but the company is still in debt.Revenue for Netflix is up 22.8-percent to approximately two billion dollars. That is up from $1.4B last year.

The video streaming service attributes the increase to signing up more subscribers internationally than predicted.

In a letter to its shareholders dated January 19, 2016 company CEO Reed Hastings and CFO David Wells said the following:

"On January 1st, just a few hours after the quarter closed, we crossed 75 million members. Our quarter-end 74.76 million members put us at over 17 million net additions for the year, showing how much the world is embracing Internet TV. We think we'll grow by over 6 million members in Q1 given our expansion of Netflix to virtually everywhere but China."

The company credits shows such as "Narcos" and "Marvel's Jessica Jones" for a rise in subscriptions.

Minimally mentioned is the Q4 debut of the series "Making a Murderer," which - based on the conversation it has sparked - is expected to impact the first quarter.

So-called alternative programming is quickly becoming mainstream, accounting for an increasing portion of the broadcast audience. Netflix says, "...Internet TV will likely have multiple winners as the various services are not direct substitutes for each other given differing sets of content."

Netflix's DVD-by-mail business continues to decline but executives say they have anticipated that decline and the business is "managing the decline well, despite increasing postal costs, generating $80 million in contribution profit in Q4."

The company finished $2.4 billion in debt in the fourth quarter and says that amount is expected to rise in 2016 and 2017.

Discussion of the Netflix Series 'Making a Murderer'