It appears that Netflix Is on the brink of breaking the 100 million global subscriber mark, a truly notable benchmark and, perhaps more importantly, a testament to the advances we have made in terms of video streaming technology; something that only became a common reality roughly ten years ago.
The company expects to reach this milestone over the coming weekend, if its projections remain on course.
Stifel’s Scott Devitt explains it this way: “Netflix ended 1Q:17 with 98.75 million subscribers and noted it expects to eclipse the 100 million subscriber mark this weekend, giving the company around 40 percent of its expected quarterly net adds in just three weeks.”
Wedbush Securities analyst Michael Pachter shares that over the past ten years, “what really did it for Netflix was the explosion of phones and tablets that allowed people to watch video everywhere. But Netflix clearly had a vision before those devices became so ubiquitous.”
Indeed, Netflix CEO Reed Hastings shares that the streaming service has about 51 million subscribers in the United States alone. By the end of 2017, though, Netflix could see a flip in subscriber base, with a majority of its members actually living and streaming from overseas markets. Hastings also says he expects the next 100 million subscribers will likely come far more quickly than the first 100 million subscribers, though he has not divulged what the timeline might look like.
Hastings did comment, “Everybody watches TV and nearly everybody has the internet, so I don’t see anything that’s going to stop Netflix from getting to most people in the United States and then eventually hopefully most people around the world.”
With this announcement, though, the valuation for Netflix has seen a bump.
According to Mark May, of Citi Research (who has given Netflix a neutral rating), “The disclosure that Netflix is going to pass the 100 million subscriber count this weekend suggests it is trending ahead of schedule towards its sub guidance for 2017.”
He goes on to say, “Considering the new seasons of House of Cards and Orange is the New Black are scheduled for release later this quarter as well, we believe guidance could prove conservative.”
At the same time, Netflix is still a ways behind pay-TV channel HBO (with 134 million global subscribers) but HBO saw a quick spurt of growth after adopting an internet-only option (somewhat inspired by the success of Netflix). The gap, then, could start to close very quickly.