Netflix reported earnings Wednesday after the market closed and the stock did something I have genuinely never seen a stock I use as a verb do: it went up 42% in a single day. It closed around $100 on Wednesday and by Thursday afternoon it was sitting near $146. For a company that most of tech Twitter had basically written off eighteen months ago, that is a wild number.
Here's what happened, in case you were busy watching inauguration coverage instead of stock tickers (fair, honestly — Monday was a lot). Netflix added just over 2 million new domestic streaming subscribers in the fourth quarter, which pushed them past 27 million in the US alone and something like 33 million worldwide once you count international. They also posted an actual profit, $8 million for the quarter, when a bunch of analysts were braced for a loss. Reed Hastings apparently said something on the earnings call about how the "Qwikster wound is now healed," which, fine, sure, if you say so.
I bring up Qwikster because I was literally starting this blog when that whole mess happened. Fall of 2011, Netflix decides to split off the DVD business into a separate company with its own website and its own login, and the internet collectively loses its mind for about three weeks until they kill the idea. I remember writing something about it back then, half annoyed as a customer and half fascinated watching a company torch a decade of goodwill in real time. So it's a little funny to be sitting here fifteen months later watching Wall Street basically apologize to Reed Hastings with a 42% pop.
Anyway. Here's my actual complaint, because a blog post about a company doing well is boring without one: I still can't find anything to watch on the thing. I've got two million new neighbors in this subscriber pool apparently, and my queue is a graveyard of documentaries I added in 2012 and never started. The interface keeps recommending the same fifteen mediocre action movies no matter what I actually watch, and half the stuff I want has that little "expiring soon" ribbon on it that means it'll vanish in a week and reappear on Amazon or nowhere at all. Adding subscribers is not the same thing as fixing the catalog, and I say that as someone who has paid them $7.99 a month without interruption since this blog existed.
What's actually going to matter, I think, is House of Cards. It premieres February 1st, all thirteen episodes at once, no weekly drip, which is the part everyone keeps calling risky and experimental like dumping a whole season online is some kind of moonshot. Kevin Spacey, David Fincher directing the pilot, a budget that's apparently north of $100 million for the season. If people actually watch the whole thing in a weekend the way Netflix is betting they will, that's the real test of whether this company is a content company now or just a really good pipe for other people's content. The subscriber numbers from Wednesday are nice. Whether Netflix is worth $146 a share depends a lot more on whether House of Cards is good than on anything in this earnings report.
Small side note because I can't help it: Apple also reported earnings this week, same day actually, and their stock dropped instead of jumped even though they sold something like 47 million iPhones last quarter, which is an absurd number I can't even picture. Everyone's writing about that one already so I'll leave it alone, but it's a strange split-screen moment — one company gets punished by the market for selling tens of millions of phones because growth is "slowing," and another gets a standing ovation for eight million dollars in profit. The stock market does not always make intuitive sense to me and this week was a pretty good example of that.
I'll probably watch House of Cards the weekend it drops, queue graveyard and all. Ask me in two weeks whether it was worth the hype or whether I just fell asleep on episode four like I do with everything else on there lately.