Netflix says it’s pleased with telco partnerships, as it adds over 5m subscribers

Netflix continued its impressive financial performance in the third quarter as it lauded the performance of its telco partnerships.

The Narcos producer also promised to spend $7-8 billion on new series next year as it said its future “largely lies in exclusive original content”.

The company saw revenues jump over 30 percent year-on-year to $2.98 billion in the three months to 30 September.

Outside of the US, sales hit $1.33 billion, up from $853 million 12 months ago, as it added over 4.4 million customers.

Its international subscriber base now stands at 56.5 million.

Revenues in the US hit $1.55 billion after the company added 850,000 new customers in its home market.

Group operating income almost doubled to $209 million, while net income hit $130 million, versus $52 million in Q3 2016.

The company continues to pursue deals with telcos, which bundle Netflix subscriptions into their own content offerings, as it looks to grow customer numbers.

Orange was the latest operator to sign a multi-country deal last month.

Citing other contracts it has signed with the likes of Altice and Proximus, in a letter to shareholders Netflix said: “We are pleased with the early results and we will continue pursuing these bundling opportunities as a complement to our core direct-to-consumer approach.”

Looking ahead, the company expects to add 6.3 million customers in Q4 and, citing its August acquisition of publisher Millarworld, claimed it was “progressing even further up the value chain to work directly with talented content creators”.

However, it noted the increasing competition in the market.

Disney is perhaps the most prescient example, having announced in August that it was exiting a distribution deal with Netflix to launch its own streaming service next year.

“It’s an exciting period and both media and technology companies see the same big opportunity as we do,” Netflix said.

“We have a good head start but our job is to improve Netflix as rapidly as possible to please our members by earning their viewing time and to stay ahead of the competition in the decades to come.”

CCS Insight analyst Paolo Pescatore said: “Overall, this was another good quarter [for Netflix].

“In particular subscriber growth stood out once again which exceeded the previous quarter and for the same period last year.

“The challenge will be in the next quarter where it might see an impact due to the recent price rises.

“We reiterate our view that the company can achieve far greater growth in international markets.

“However, to maintain and, in some cases, exceed growth, Netflix will be forced to raise its spending on content and marketing.”

Read more: Not everyone will survive the streaming wars, says Telia TV Chief

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