The Tribune

By CHRIS ILLING

CCO @ ActivTrades Corp

The final trading day of last week started with a huge information (IT) problem that began in Australia and spread worldwide. The disruption affected Windows PCs in several industries, and appears related to the security software supplied by CrowdStrike. The company’s share price fell by around 12 percent as a result.

The global IT outages were also felt in the financial markets. Oil and energy traders were just as affected as stock, currency and bond traders from London to Frankfurt, and Munich to Singapore. 

After the first turmoil of the day, Netflix started off the next quarterly earnings report and was able to increase the number of paying clients. Revenue rose by around 17 percent year-on-year to $9.6bn in the past quarter, Netflix announced after the close of the US stock market. The bottom line is that profits rose from $1.49bn to just under $2.15bn.

Only in the revenue forecast for the current quarter does Netflix slightly miss analyst expectations. At the same time, the streaming leader is predicting that the growth in the number of customers would be lower than in the same quarter last year, as the action against the free riders had been strongly reflected at that time. This bit of bad news was enough to drive the share price down by around 2 percent to $632 per share.

Netflix now has around 277.7m customer households worldwide. Since last year, the service has been taking action against password sharing. This is also driving the growth of user numbers. This is because many previous freeloaders got their own subscription instead of turning their backs on Netflix.

Netflix continues to grow unchecked and wants to snatch more viewers away from classic television. In the past quarter, the video streaming market leader gained a good eight million customer households. There were also significant increases in revenue and profit, and the company will have more money to invest in new films and series.

Netflix faces the unique challenge of designing a program for more than 600m people who use the service for an average of several hours a day, as co-chief executive Ted Sarandos emphasised. The streaming giant therefore spends around $17bn per year on series, films and live broadcasts. And the amount will increase with sales growth. Netflix has recently experimented more with live events, and is also venturing into the expensive sports broadcast business with two games of the American National Football League (NFL) at Christmas.