Netflix's gamble to spend all that money on premium original content seems to have paid off. The company's subscriber base soared by a third more than the last quarter with its Q4 2016 earnings slightly beating expected numbers.
The entertainment streaming company had only expected a rise of 5.2 million subscriptions but managed to get 7.1 million new subscribers globally, beating targets in the US and abroad despite raising its prices. The year ended with a whopping 93.8 million subscribers in total indicating that the 100 million mark may not be too far the next quarter.
"It's becoming an internet TV world, which presents both challenges and opportunities for Netflix as we strive to earn screen time," the company said celebrating its achievement.
The company announced earnings of 15 cents per share and a total revenue of $2.48bn (£2.02bn), slightly beating a Reuters estimate of $2.47bn in revenue.
A key factor in achieving this result was the contribution of premium original content, which Netflix funds from scratch instead of depending on studios to make the shows for them. Shows such as Stranger Things, The Crown, Luke Cage and the remake of Gilmore Girls headlined the company's Netflix Originals move.
Although Netflix still offers movies and series through licensing deals, hundreds of movies disappeared from Netflix in 2016 as it ended several key content deals with top studios and distributors. In the same year, Netflix announced it would release over 1,000 hours of new original content — a stark yet bold deviation from its current library of 600 hours of original shows and movies combined.
Netflix is now available in over 190 countries and is looking to grow. In fact, a recent study indicated that video streaming services led by Netflix are slowly displacing physical DVD sales in the US.
However, competition in the segment is growing by the day with players like Amazon looking to make big bucks in the streaming format. Recent rumours indicate that Apple may also be in talks with Hollywood producers for original content for the internet audience.
Check out the most anticipated content coming to Netflix 2017.