On the one hand, the online streaming giants boasted a total membership base 33% larger than a year earlier, far exceeding its own estimates.
On the other, earnings missed estimates. Earnings of $1.15 a share fell shy of forecasts by a penny, according to Thomson Reuters estimates, while revenue of $1.34 billion was in-line with expectations.
To be fair, analysts had high hopes for a quarter which saw more than 30 Emmy nominations, the launch of season two of critically-acclaimed Orange is the New Black, and expansion into all corners of Europe. Netflix's progress is none so clear than when comparing to a year earlier -- earnings came in more than double and revenue climbed 25.2%, while total subscriptions surpassed the 50-million-mark for the first time, including more than 36 million domestic streaming subscribers. TheStreet's Keris Lahiff has details on Neflix's quarterly results:
WATCH: More tech videos on TheStreet TV | More videos from Keris Alison Lahiff "The business part is really simply; it's to continue to drive subscriber growth and pull the levers of content and marketing. As long as they keep growing subscribers, the margins keep expanding, investors are mostly comfortable," S&P Capital IQ senior analyst Tuna Amobi told TheStreet. Threats on Content and Distribution
Though Time Warner (TWX) has knocked back an offer from 21st Century Fox (FOXA), the consolidation of the two content production powerhouses may have an effect on Netflix's bargaining power. Netflix management, however, remain unfazed. "It's very hard to corner the market on creativity and ideas," Netflix chief content officer Ted Sarandos said on a post-earnings conference call. "I don't see how it would affect things too dramatically in the early days." "We'll take it as it comes," added CEO Reed Hastings. "The more we're working directly with producers, the less vulnerable we are to aggregation in the big content suppliers." "For them more risk would be on the consolidation of distributors as opposed to content players," Amobi said of the Time Warner/Fox threat. "Netflix is moving towards original programming in their own right. That's going to mitigate that risk as long as they stay successful." The company remains more concerned with the net neutrality debate, a topic on which Netflix has already gone on record with the Federal Communications Commission. "Our focus on strong net neutrality, including interconnection, is about preventing large ISPs (Internet service providers) from holding our joint customers hostage with poor performance to extract payments from us," the company said in a statement, urging the FCC to block the Comcast (CMCSA - Get Report)/Time Warner Cable (TWX) merger or to at least prevent them from charging for interconnection.