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In the world of online streaming video, it’s all about “eyes on the tube” as in “number of subscribers.” Netflix Inc. (NASDAQ:NFLXD) just raised the bar exponentially as the company added 60% more international subscribers than expected in the September quarter.

Netflix said it would add 2 million international subscribers in the recently completed quarter. Instead it added 3.2 million. The result was a 20% jump in stock prices in after-hours trading Monday.


U.S. Subscriptions Up As Well

Even in the U.S. where the company expected to add about 300,000 subscribers, it beat that prediction by adding 370,000. The year-ago quarter’s numbers were more impressive, however, when Netflix added 880,000 subscribers in the U.S.

Investors understand that the U. S. streaming market is maturing and subject to more competition from other services such as Amazon.com Inc. (NASDAQ:AMZND) and Hulu (owned by a consortium consisting of The Walt Disney Co. (NYSE:DISF), Twenty-First Century Fox (NASDAQ:FOXD), Comcast Corp. Stock not found CMSCA and Time Warner Inc. (:TWXN/A)).

Big Change May Be Coming

Original programming and a wealth of available material have kept Netflix on top. One area, however, has lagged behind – offline. This is a big deal because until now, downloading entertainment has not been an option with Netflix.

Amazon and Apple Inc. (NASDAQ:AAPLB), meanwhile, have long had the “download and go” market covered. Netflix has stayed out primarily because Netflix executives just didn’t think the ability to download content was important enough to justify the investment.

Rumor has it, however that Netflix execs might be changing their minds and a download option may soon come to Netflix.

Multi-Streaming Subscriptions Growing

Standing out from the crowd is getting harder – not just because there are more options but because consumer habits are changing. More and more people are subscribing to multiple streaming services as a way to add entertainment content.

This is especially important as services like Netflix, Amazon and others add more original content. This has made self-bundling of streaming content a growing phenomenon.


Increased Competition

Despite the good news Monday, it’s a fact that Netflix has been facing growing competition, not only from online streamers, but also from innovation in the pay and OTT TV industry. That may be a prime reason the company said it would invest as much as $5 billion on original content this year.

Analysts are sending mixed signals with Pacific Crest’s Andy Hargreaves predicting accelerated subscription growth in Q4 while others such as Deutsche Bank’s Bryan Kraft noting, “With penetration exceeding 50% of U.S. broadband homes, the incremental subscriber is more difficult to attract.”

According to Wall Street Pit, of 40 analysts covering Netflix, 21 rate it a “Buy,” 12 recommend “Hold” and the balance say “Sell.”

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