Netflix tops 40 million members, credits multiple viewing platforms

Netflix said it will double its original content investment, which will still account for less than 10 percent of the overall content spending.

Netflix's strategy to drop its service in multiple distribution channels such as smart TVs, Apple TV, Roku, Google's Chromecast, tablets and smartphones is paying off nicely as the company has landed more than 40 million subscribers.

The company reported third quarter earnings of 52 cents a share on revenue of $1.1 billion. Wall Street was looking for earnings of 49 cents a share. Netflix's outlook for the fourth quarter was above expectations of 46 cents a share, but had a wide range from 47 cents a share to 73 cents a share.

netflix q3 financials

Netflix's shareholder letter had two common themes: Original content and distribution matters. On the original content front, Netflix touted its Emmy for House of Cards and noted Orange is the New Black has good buzz and viewership. The original content investment has worked so well that Netflix said it will double its investment, which will still account for less than 10 percent of the overall content spending.

As for distribution, Netflix indicated that smarter television is helping. In a shareholder letter, CEO Reid Hoffman and CFO David Wells said:

The growth of smart TVs and Internet TV devices, such as Apple TV, Roku, and Chromecast, are increasing the availability of TV streaming platforms. Tablets and phones also are rapidly growing as Netflix viewing platforms.

Netflix also aims to integrate with cable set-top boxes.

We are open to more of these integrations with cable set-tops around the world, but given the fragmented technology footprints, we think it will be many years before cable set-top boxes match Internet set-top boxes for Netflix streaming volume. As a general rule, we’re happy to support devices from other video providers as long as we get application placement commensurate with our popularity.

netflix q4 outlook