Netflix shares soar following successful Q4 earnings

Netflix Inc (NASDAQ:NFLX) beat analysts expectations for the last quarter of 2016, gaining 1.85 million more subscribers than forecast sending shares up eight percent in extended trading.

According to the company, this is the biggest quarterly gain in subscribers in the company’s history.

“The future battleground at home is now in keeping hold of customers as much as it is in trying to acquire new ones,” said Neil Saunders, head of retail analyst firm Conlumino.

“In our view, the fact that consumers have readily absorbed the price increase, and that Netflix has continued to advance its subscriber numbers in spite of it, indicates the company is now firmly in pole position in the streaming arena.”

The streaming video giant puts the increase in new subscribers down to international growth – Netflix is now available in 190 countries – and the original content aired.

Since its initial push into original content with House of Cards in 2013, original shows have continued to gain popularity and gain critical acclaim. Its most recent original show, The Crown, was awarded two Golden Globes.

“Netflix is increasing overall content spending this year and specifically focusing on original programming,” eMarketer analyst Paul Verna said.

“This is both a reflection of the company’s success in using high-quality originals to attract subscribers and a recognition that its competitors are also doubling down on exclusive content.”

In 2016 the streaming pioneer planned to release 1,000 hours of new original content. This was a significant expansion of its current library of 600 hours of original shows and films.

“It’s becoming an internet TV world, which presents both challenges and opportunities for Netflix as we strive to earn screen time,” Netflix said in its quarterly letter to shareholders.

Up to Wednesday’s close of $133.26, Netflix’s stock rose 33.5 percent since it reported its third-quarter results in October.