Netflix's Price Rises Succeed

Netflix reported 43% year-on-year growth in revenue to 3.7 billion US dollars for the first quarter, due to a 25% increase in subscribers and a 14% rise in its average selling price.  The video streaming company said that global net adds totalled 7.41 million, up 50% year-over-year and ahead of its 6.35 million forecast. "The variance relative to our guidance was driven by continued strong acquisition trends across the globe which we attribute to the growing breadth of our content and the worldwide adoption of internet entertainment," the company said.

For the current quarter, Netflix forecast revenue of 3.9 billion dollars, which would represent a 41% year-on-year increase. It anticipates 6.2 million net additions globally, including 5 million outside the US. "We’ll have 7.5 billion to 8 billion dollars of content expense (on a P&L basis) in 2018 across a wide variety of formats (series, films, unscripted, docs, comedy specials, non-English language) to serve the diverse tastes of our growing global membership base," it added. Source: Netflix statement

My report for STL Partners exploring the future of Netflix and Spotify is available here.

XBox Music Leads Artist Payouts

Source: Statista

EU Fibre-to-the-Home Bill To Top 500 Billion Euros

The European Commission has estimated that about 500 billion euros of capital expenditure will be required to expand fibre to the home (FTTH) services across the EU by 2025. Speaking at the Gigabit Access event in Brussels on Tuesday, Anthony Whelan, director of DG Connect Directorate B at the European commission, said: "We estimate the sort of investment required, if you follow the normal capex structures of the industry, will be somewhere in the region of 500 billion euros, and we see an investment cycle that would see us hitting around 335 billion investment by 2025. So you are looking at a shortfall in excess of 150 billion euros and various strategies need to be devised to address that gap." source: Total Telecom article

Enterprise Sales Lift Huawei

Huawei reported a 16% year-on-year increase in revenue for 2017 to 603.6 billion Chinese yuan (92.5 billion US dollars based on year-end exchange rates). The growth was driven primarily by a 35% increase in Huawei's enterprise revenues to 54.9 billion yuan.  In 2017, Huawei spent 89.7 billion yuan on R&D, up 17% compared with 2016. source: Huawei statement

Tencent Enjoys Bumper 2017

Tencent reported a 56% increase in revenues in 2017 to 237.8 billion Chinese yuan (36.4 billion US dollars), driven by a 65% rise in advertising revenues and a 52% rise in value added services revenues generated by its social networks, which include QQ and WeChat.

Tencent said that its Tencent Video service achieved rapid growth in traffic and paying users, driven by the popularity of its exclusive drama series, movies and self-commissioned content. "We became the leading video streaming platform in China with over 137 million mobile daily active users during the fourth quarter and 56 million subscriptions as of the end of 2017," it added. source: Tencent statement

China Mobile Sounds Bullish Note

Boosted by its wireless data growth, China Mobile recorded operating revenue of 740.5 billion Chinese yuan (117 billion US dollars) for 2017, up 4.5% from 2016. It said revenue growth in telecommunications services achieved a six-year high of 7.2%, outpacing the industry average. Revenue from wireless data traffic, on a full-year basis, accounted for more than half of the total telecommunications services revenue for the first time.

China Mobile said the total number of connections reached 1.229 billion, of which 887 million were mobile connections, 113 million were wireline broadband connections and 229 million were Internet of Things connections. IoT revenue rose 44% to 5.5 billion yuan

In 2018, the operator is aiming to take its total number of connections above 1.4 billion, partly by adding another 120 million IoT connections. source: China Mobile statement

Amazon Accelerates Through Fourth Quarter

Stripping out the impact of currency movements, Amazon reported a 36% year-on-year increase in net sales for the fourth quarter to 60.5 billion US dollars. That compares with a 31% increase across the whole of 2017. Amazon forecast that net sales will grow between 34% and 42% year-on-year in the current quarter to between 47.75 billion and 50.75 billion dollars.

Amazon Web Services' revenues jumped 45% in the fourth quarter to 5.1 billion dollars. Amazon said more than five billion items shipped with Prime worldwide in 2017, as more new members joined last year than in any previous year, both worldwide and in the U.S. source: Amazon statement

Apple Cranks Up Double-Digit Growth

Apple reported a 13% year-on-year increase in revenue for the quarter ending December 30th to 88.3 billion US dollars, fuelled by a 13% increase in iPhone revenues. Apple forecast its revenue will be between 60 billion and 62 billion dollars in the current quarter, which would represent a year-on-year increase of between 13% and 17%.

Tim Cook, Apple’s CEO, said. “We’ve also achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January. That’s an increase of 30% in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers.” source: Apple statement