Netflix dropped its Q4 numbers last night after the bell, and by the time the market opened this morning the stock was up something like 10%, which apparently is enough to push the whole company past a $100 billion market cap for the first time ever. Eight point three million new subscribers added in three months. I read that twice because it didn't seem like a real number. Analysts were expecting something closer to 6.3 million, so this wasn't just a good quarter, it was a "wait, what" quarter. Total worldwide streaming subscribers now sit at around 117.5 million.
I've been off cable for about three years now, and every time Netflix has one of these blowout earnings days I get a weird little pang of buyer's remorse, even though objectively I don't regret it. Somewhere around October they quietly bumped Standard from $9.99 to $10.99 and Premium up to $13.99, and Basic stayed at $7.99 because apparently thats the one nobody's supposed to notice moving. I didn't cancel over it, obviously, nobody does, thats sort of the whole trick. You grumble for a week and then you keep paying because the alternative is going back to a cable bill thats triple that for a channel package where 90% of it is home shopping and infomercials at 2am.
What actually gets me isn't the price, its the discovery problem. I spent probably forty minutes last weekend scrolling through rows of stuff I'd already seen or didn't want before giving up and just rewatching The Office again, which I think I'm now on my fourth full pass of. The algorithm knows I like sitcoms about paper companies and yet somehow every session still starts with fifteen minutes of "Trending Now" and rows I've already dismissed six times. More subscribers and more money apparently doesn't mean the browsing UI gets any less exhausting. If anything it feels like it's gotten more cluttered over the past year, more autoplay previews blaring at me before I've even picked anything, more rows that are just reshuffled versions of the same twenty titles.
None of that seems to matter to Wall Street though, and honestly I get why. The subscriber growth was strong basically everywhere, not just the US, and international is clearly where the real story is now, the international segment added something like 6 million of that 8.3 million total. Reed Hastings has been saying for a couple years that the US market is close to saturated and international is the growth engine, and this quarter is basically him getting to say "told you so" out loud on the earnings call.
Theres also the content spend angle, which I think gets underdiscussed. Theyve said theyre planning to spend somewhere in the neighborhood of $7-8 billion on content this year, which is an absolutely bananas number when you sit with it for a second. Thats not marketing spend or infrastructure, thats just shows and movies. For comparison thats more than most entire TV networks used to spend on everything combined a decade ago. Some of that is clearly working (I will defend Godless and The Toys That Made Us to anyone who'll listen), some of it is Netflix just throwing volume at the wall because volume itself seems to be part of the strategy now. More originals means more reasons to open the app, even if half of them you scroll right past.
Anyway, stock jumping 10% in a day on the back of subscriber numbers is a pretty rare thing to see happen to a company that's been public since 2002, and it's wild that a DVD-by-mail company from Los Gatos is now worth more than most people would've guessed possible five years ago. I'll be curious whether this is the quarter where the price increases finally start to bite a little, or whether people really will just keep paying no matter what the number on the bill says. My money's on the second one. Mine certainly hasn't stopped.
Also, if anyone has actual recommendations that aren't The Office, I'm listening. I've apparently exhausted my own ability to pick something new.