Ahead of Netflix’s quarterly earnings report on Tuesday, new figures from a Wall Street analyst show it smashed all records in the third quarter by releasing 676 hours of original programming, up 50% from the second quarter.
Cowen & Co. analyst John Blackledge delivered the eye-catching stat as part of his monthly survey of 2,500 consumers (both cord-cutters and those with pay-TV subscriptions) about their subscription video habits.
Netflix remains the top draw by far among all respondents, with 27% saying they turn to the platform as their top streaming choice, followed by basic cable (20%), broadcast TV (18%) and YouTube (12%). The gap is wider among those 18 to 34 years old, with 40% of those younger viewers rating Netflix the No. 1 source, followed by YouTube at 17% and basic cable at 12%. Even when cord-cutters and cord-nevers are excluded, Netflix is a strong No. 2 choice for viewers, with a 24% first-choice score, compared with 26% for basic cable.
While many skeptics question the logic of Netflix spending $13 billion on content, as they are projected to do in 2018, Blackledge believes the outlay gets tangible results. “Netflix’s investment in high quality episodic content across all genres and feature films likely ensures the top spot in the living room over time,” he wrote. He said the flood of new originals in the third quarter, including high-profile titles like Bojack Horseman and Maniac will be a key factor in financial results that Blackledge predicts will be “solid.”
Over the summer, Netflix saw its stock get pummeled after a less-than-scintillating second-quarter earnings report. In August, CFO David Wells announced his plan to exit the company after an eight-year run.
Blackledge, who rates Netflix stock an “outperform,” maintains a $400 12-month price target.
Looking ahead to next week’s third-quarter numbers, Blackledge estimates the company will add 640,000 U.S. streaming subscribers, slightly below management’s guidance, with 4.35 million international additions. Revenue should come in just shy of the $4 billion forecast by the company, he said, which would be a 33% jump from the same period the prior year.