Netflix Delivers Q3 Revenue, Subscriber Gains

Netflix delivered strong growth in Q3, with total revenues up 34 percent to $4 billion and net profit rising to $403 million, while total memberships increased by 7 million to 137.1 million.

U.S. streaming revenues were $1.9 billion in the period, from 57 million paid memberships. International streaming revenues rose to $2 billion from 73.5 million paid memberships. For Q4, the company is forecasting paid net additions of 7.6 million, versus 6.4 million last year, and total revenues of $4.2 billion

The company’s letter to shareholders noted the importance of the ever-increasing slate of originals at Netflix. Addressing Europe’s new 30 percent local content quota, the company noted: “We anticipate being able to meet these requirements by evolving our content offering. We are heavily investing around the world to share stories broadly and to strengthen local production capacity and opportunity. We’d prefer to focus on making our service great for our members, which would include producing local content, rather than on satisfying quotas, but we anticipate that a regional content quota which approximates the region’s share of our global membership will only marginally reduce member satisfaction. Nonetheless, quotas, regardless of market size, can negatively impact both the customer experience and creativity. We believe a more effective way for a country to support strong local content is to directly incentivize local content creators, independent of the distribution channel.”