Netflix adds more subscribers than expected around the world in the third quarter and bets on original content creation. Fred Katayama reports.
Netflix added 5.3 million subscribers in the third quarter. That's much more than Wall Street expected. It also projected growth that was in line with forecasts. That initially sent Netflix's stock to a record high, but it later pulled back. Most of Netflix's new subscriptions came from international markets with only 850,000 coming from the United States. Learning from the success of its original hit shows such as "House of Cards," Netflix also said it's boosting its content budget by up to $8 billion next year. 24/7 Wall Street's Douglas McIntyre. (SOUNDBITE) DOUGLAS A. MCINTYRE, EDITOR-IN-CHIEF AND CEO, 24/7 WALL ST., LLC (ENGLISH) SAYING: "The good news is that their revenue is growing fast and their subscription base is now over 100,000 million, which is extraordinary. The bad news is that they plan to spend $8 billion on programming next year. And it's not clear to anybody whether they make much money on that or whether it's just a huge loss leader." Netflix is competing with other streaming services, such as Amazon's Prime Video and traditional media companies. Earlier this year, Walt Disney decided it'll yank its first-run movies from Netflix in the United States starting in 2019. Disney is launching its own online offering.