Netflix a Big Hit with Subscribers

Netflix reels in 4.3 million new subscribers last quarter.
6:29 | 01/21/15

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Transcript for Netflix a Big Hit with Subscribers
Okay. It is Wednesday January 21 the markets in new Yorker open and a big number this morning four point three million. That's a member of new subscribers Netflix added last quarter beating estimates and setting Netflix shares soaring today. Tac international growth was strong as well Netflix said in a new quarterly profit record. Up 83 point four million dollars. However when I'm Dan Butler in New York here's the tails and Netflix big quarter Jeff MacKey from Yahoo! finance on this Wednesday morning. Mr. backyard talk over the past Puerto than what exactly Howard this growth. Well you know there were those subscribers but actually got to have margin of all profit basis meaning how much to the bottom line did any individuals are wrapped. That was actually light on expectations that 63 some sense of this big earnings beat was based on a tax ruling. Which is not the kind of thing you put in the headlines because it doesn't kind of catch your eye in the bold print there for investors. But that's really out Netflix what about being make their money they're gonna raise another billion dollars to make yet more content. It was left and Jessica Korda but the stock was down 25% in the last three months. And so anything north of disaster was got a good enough for investors. Lot of folks short this morning getting caught not having pleasant days so far. It like with enemy. On the other record list then to find out exactly how best to react to delegates that just meant the first. And Ellis sort of strategy of the Netflix is taking up now because not all they obviously taking up some new content but they are creating their own content as well I mean there really. Beacon isn't serious heavy hitters in the entertainment industry is that what's bringing in these nuisance. You know and that's the game after playing Netflix kind of in Baghdad as a few years ago it seemed absolutely preposterous that there's. Former DV DE mail rental company. Would actually start creating contact and yet Netflix did a terrific job with it they're hip ratio is it is astonishing it's the MB of any Hollywood studio. And some Netflix set off this big game this arms race that you have now everyone's pain for contact so it's it seems to be the direction that forces going and other companies are haven't played of that lead because it's all about that exclusivity right kneecap any company really. Can just buy the rights to stream map sure sign felled or whatever but if you have exclusive content while that's hard to get a monthly sobs and Netflix is playing that game much better and anyone else out there right now and that's what really is the reason that's your entire investment thesis. Beyond just the courtly results investors less impressed by these tax write offs and things. But the fact that Netflix continues to churn out hits and people are actually pain for a monthly basis house of cards. Oranges the new budget some of the big headlines I was who has some of the cliff at there as well. Netflix not the only player in the game as you point out there Amazon's prime service announcing that is on a fun and new Woody Allen TV show it's also got twelve movies. That it's going to distribute theatrically as well so can these digital distributors and we commend essentially the Hollywood at its own game. Well you know if if you actually kind of went through any of their Sony leaked emails beating Hollywood at its own game is exactly like being Kasparov at chess. Hollywood perhaps not necessarily cutting edge when it comes to business thought leaders. So shirt they they have actually nepalese are ready demonstrably eating into some of their studios. When they trade oranges new Blackmon NBC indeed an ABC any network or good solid love something that's high quality and ahead house of cards the same way and so. They have to be respected again it was laughable few years ago when Netflix of their making content. Now you've got to meet choose woody Allen's sitcom. That makes no sense to me whatsoever it doesn't make any sense the Woody Allen he said so himself actually in Israel is very much and characters that this is kind of a bad idea expect going to be disappointed. No one really bad and I they just went out and look for some other seventy something year old person come out with a sitcom. I think it. Rich texture of the garden event at not a shortage of that is not. But that's government tangent about Amazon prime service had its offering on it isn't running the risk though and a retirement and Netflix but is Amazon ran the risk though in little distract from the core businesses. You know Amazon's core business they used to be a bookseller. So they don't really have a bill do anything at its Amazon. I admire them so much just as merchants because really there core business is just satisfying customers on an Amazon prime customer. And I'm constantly just sort of finding little things is that that. They're giving me when really element had four is the shipping arbitrage because it would cost and worn out stuff shift. Shipped so that they Amazon prime offended if they it's a good example as a distracting people. Kind of but you know what Amazon's a merchant and really with this prime they're getting people married to their site they are the masters of of stickiness. And anything they can add to that prime service just works out quite well for them on the bottom line. In terms of of just profitability they make a ton of money at just restricted monoline its its heavy gravity revenues as they say and financial want to fail. When someone actually signs upper Amazon prime becomes a customer and they tend not to go away because he barely notice it on the credit card. Well get good before we get too deep and I want to ask you lastly about Netflix as far as the stock performance and obviously it's getting this bit of a boost today pointed out fact that hasn't been doing too well lately. Is that a buyer we watching this with swear which are sentiment. Traders. Art moved on to look at some other company's news development of a stealth correction here there's some of these stocks got apple over 10% off its gains Alibaba who actually. Kind of old wounds Beers I can tell everything in China Yahoo! has a big stake there but that gives me no special insight and the fact that Alley Bob batsman now Lester powers and China. That stock 40% off its highs and so traders on Wall Street aren't looking pass that's legends at bat he can make 15% there. Maybe I should buy the dip on some of these other beaten down tax Netflix in terms of its stock price is a big value here. That these this is kind of this and we're so far into the nose bleed section on valuation that. Really and it's kind of the valuation makes much sense today as it did 24 hours ago when the stock rose 15% lower. It's just that volatile pick an axis QB Kumble the movie studio and distribution site. Of the future of ensure the companies to buy right here right now if they fail. It could get ugly too big ifs right there mr. back to relieve you with that this Wednesday have a good days there. YouTube my friend jet pack finance scorching keep up with headlines right here You go much in the big number on Dan Butler park.

This transcript has been automatically generated and may not be 100% accurate.

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