Netflix yesterday announced that Q3 revenue that, at $2.99 billion, was up more than 30 percent from the same period a year ago; at the same time, the company said it added 5.3 million subscribers, bringing its total to more than 109 million.
Netflix also said yesterday that it plans to spend $8 billion on original content in 2018, up from the $6 billion it is spending this year.
However, as Fortune points out, success has a cost: “Netflix has now reported several straight quarters of exceptional subscriber growth, the number Wall Street most often seems to use as the metric for judging the company’s success. But, as Netflix also continues to operate with negative cash flow (-$465 million in the third quarter, compared to -$506 million in the same period last year), the company’s high-spending ways will remain under scrutiny.”
Netflix also said yesterday that it plans to spend $8 billion on original content in 2018, up from the $6 billion it is spending this year.
However, as Fortune points out, success has a cost: “Netflix has now reported several straight quarters of exceptional subscriber growth, the number Wall Street most often seems to use as the metric for judging the company’s success. But, as Netflix also continues to operate with negative cash flow (-$465 million in the third quarter, compared to -$506 million in the same period last year), the company’s high-spending ways will remain under scrutiny.”
- KC's View:
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The lesson, it seems to me, is that differentiated content - otherwise known in other business segments as private label - is ket to business sustainability these days. I’m not smart enough to figure out how this all works out economically except to know that at some point it has to. But I do know that with increased competition comes the need to offer products that nobody else has.
Success is found in the differences, not the similarities.
