Netflix this week announced the company had a “beautiful Q4” achieving streaming revenue growth of 36% to over $11 billion, 24 million new memberships additions (compared to 19 million in 2016), full-year positive international contribution profit for the first time, and more than doubling global operating income.
Q4 capped a strong year for Netflix original content with returning seasons of The Crown and Black Mirror as well as the international phenomenon Stranger Things. Netflix’s largest investment in original films to date, Bright, a fantasy action movie starring Will Smith, was a major success and drove a notable lift in acquisition. In its first month, Bright has become one of Netflix’s most viewed original titles ever. The company is therefore planning a sequel as well as additional investment in original films.
Netflix also debuted Dark, their first German original drama series. In its letter to investors, Netflix says “high-quality content can travel globally, irrespective of language; for instance, Dark, in addition to being well-received in its home country, has also been viewed by millions of members in the US and has outsized watching throughout Europe and Latin America. Netflix will expand this initiative with over 30 international original series this year, including projects from France, Poland, India, Korea and Japan.
Netflix also lays out the competitive landscape as they see it:
We have been talking about the transition from linear to streaming for the past 10 years. As this trend becomes increasingly evident, more companies are entering the market for premium video content. On the commercial-free tech side, Amazon Studios is likely to bring in a strong new leader given their large content budgets, and Apple is growing its programming, which we presume will either be bundled with Apple Music or with iOS.
Facebook and YouTube are expanding and competing in free ad-supported video content. With their multi-billion global audiences, free ad-supported internet video is a big force in the market for entertainment time, as well as a great advertising vehicle for Netflix.
Traditional media companies are also expanding into streaming. Disney is in the process of acquiring most of 21st Century Fox and plans to launch a direct-to-consumer service in 2019 with a beloved brand and great franchises. The market for entertainment time is vast and can support many successful services. 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 full letter to investors here.
MacDailyNews Take: That would be amazing if Apple bundled it with iOS, but we bet they want something for it. Apple Music doesn’t really make sense.
What we want to see is an “Apple Prime,” as described by Goldman Sachs analysts Simona Jankowski and Drew Borst is an October 2016 note to clients. This “Apple Prime” subscription would include the Apple Music service, access to the iTunes library of TV shows and movies (some for free), Apple’s forthcoming original content, and exclusive sports programming.
Further, we’d really like to see a way to pay for all of the Apple services we choose for one price. Give us a bunch of tick boxes and let us choose our combination of iCloud storage, Apple Music, iTunes Match, etc. and let us pay a single price for all of our choices. — MacDailyNews, October 17, 2016
[Attribution: 9to5Mac. Thanks to MacDailyNews Readers “Dan K.” and “Judge Bork” for the heads up.]