Netflix Inc.'s Grows Profit After Falling Short on Subscriptions

The American entertainment company Netflix Inc. grew its profit while subscriber growth slowed in the first quarter of 2017. For instance, content expending was reduced allowing the company to increase its revenue after coming below expectations on daily subscriptions. 

Netflix expected to increase its membership up to 98.9 million subscribers, but the company only reported a total of 98.75 million members during the year’s first months.  Yet, the streaming service is not concerned about this situation as they assure they are on track of surpassing 100 million soon.

Netflix is also pushing hard to expand internationally and elevate its revenue while the U.S. market matures. In fact, Netflix’s executives view China as the largest potential market for the company making it necessary to promote themselves in the Asian country sooner than later. In order to keep increasing the company’s profit, they are considering extending to other countries than China as content expending will surely increase in the near future.

Relevance to Marketing:

Netflix Inc.’s goal is to keep its revenue increasing and the company is doing its best to make it happen. Even though the streaming service slowed  its subscription growth, Netflix reduced content expending to keep on raising its profit. This strategy is a good example of the marketing concept as the company’s executives are doing whatever they can to make the company more profitable and better prepared for the future. If Netflix goes for higher content costs to produce better series and more original movies, its revenue will certainly go down as the company is expending more money than before. Yet, Netflix’s executives are preparing the company for such events as they keep on raising its profit while they can so they could have enough money to invest on streaming media and better market the company in the near future.

Name: Javier León

Class: MKTG 3343

Article: Netflix’s Subscriber Growth Slows at Home and Abroad

Link to WSJ Website: https://www.wsj.com/articles/netflixs-subscriber-growth-slows-at-home-and-abroad-1492460461