Netflix Soars, Esquire Goes Dark as More TV Viewers Move Online

An hour after Comcast said its Esquire cable network will shut down, a sign of flagging interest in traditional pay TV, Netflix reported its biggest quarter ever, beating analysts’ estimates on new subscribers and validating its vision of a world where everyone watches TV online and on-demand, according to Bloomberg.

Netflix signed up a record 7.05 million customers in the fourth quarter of 2016 to cap the biggest year in company history. The world’s largest paid video service added 19 million customers worldwide in 2016 after expanding to more than 190 countries, reaching everywhere but China, North Korea, Syria and Crimea. The shares soared as much as 9.6 percent to $146 in extended trading, an all-time high.

The rapid growth of global, online TV services, led by Netflix, is challenging many of the world’s largest media and telecommunications companies to adapt to a new world in which more people spurn the traditional $85-a-month cable subscription and spend less time watching live TV. After 20 years of operating near break-even, and spending every spare cent developing programming or marketing the service to new subscribers, Netflix finally expects to deliver material profit.

Netflix will release 42 titles through the end of the quarter. Their spending has prompted peers to warn that too many shows are being made and that is unsustainable. The TV industry produced an all-time high 450-plus scripted shows in 2016, according to data from cable network FX. Netflix will spend $6 billion on programming in 2017, part of its longer-term budget of $14.5 billion. The company forecasts negative free cash flow of $2 billion in 2017 and said it will continue to borrow as needed.