Netflix has just had a strong quarter. The streaming service’s quarterly earnings report for Q3 2017 pegs the global subscriber base at 109.25 million, up from around 86.74 million in the same quarter last year. It is estimated that in the next quarter, the global subscriber base will cross 115 million users, even though the streaming service will be increasing subscription services in some countries. The company reported that global streaming revenue in Q3 2017 rose 33% year-on-year (y-o-y), helped by a 24% increase in average paid memberships, and operating income nearly doubled y-o-y to $209 million.
This puts the steaming service in a strong position to build on the “originals” library of content. Netflix is now five years into creating original streaming content, including popular series such as Orange is the New Black, House of Cards, Stranger Things, Narcos, a modern remake of Fuller House and more recently Friends from College and Ozark, to name a few. There are no intentions of slowing down either—Netflix suggests that it intends to spend $7-8 billion next year on acquiring more new and original content.
When put in perspective, Netflix’s bullish plans for 2018 and beyond do put it in a strong position when competing against rivals such as Amazon’s Prime Video, HBO’s Now and a host of other streaming services, some of which provide strong competition at least in the US market. Apple is also believed to be investing $1 billion on original content, though it is anyone’s guess whether the company will launch a streaming service or continue to use the pay-as-you-watch strategy on the iTunes Store.
What will be a bigger worry for Netflix is the fact that Disney intends to launch its own streaming service sometime in 2019—they own the Marvel and Stars Wars franchises, which means that the exclusivity agreement with Netflix will end.
One of the ways for Netflix to remain on strong ground is to make itself available to users almost everywhere. That is where the plan for in-flight Netflix streaming becomes very relevant. The company intends to start in-flight Netflix in 2018, with partnerships with multiple airlines. They will use DVD-quality mobile encoding at 250kbps, which will be good enough for the in-flight entertainment system displays, but will require significant satellite tech to stream content to aircraft globally.
There are no subscription pricing changes on the horizon for users in India—the plans remain the same, with the basic Standard Definition plan priced at Rs500 per month, HD plan priced at Rs650 per month and the Ultra HD plan at Rs800 per month.