Personal Finance

Netflix's Earnings Call: Don't Miss These Must-See Quotes

A red couch facing a TV in a home theater.

Netflix (NASDAQ: NFLX) continues to fire on all cylinders, with another quarter of record subscriber growth behind it. Revenue is surging as customers flock to the service, even as the company successfully rolls out price increases .

For a closer look at how Netflix's business is faring and how management is thinking about opportunities ahead, here's a look at some key quotes from the company's third-quarter earnings call . In these excerpts, management discusses its tests with lower price tiers, bundled deals, and movie theaters.

A red couch facing a TV in a home theater.

Image source: Getty Images.

Experimenting with lower price tiers

Late last year, Netflix started testing mobile-only plans in developing markets as a way to make its service more accessible and broaden its global reach. When asked during the company's first-quarter earnings call about how these tests were progressing, Netflix chief product officer Greg Peters seemed excited about the potential to reach these markets but admitted that the company hasn't finalized its model for reaching these customers yet.

Peters explained:

I think that's a great example of something that we're trying out, we're not positive that's the right model, but it's -- we're quite certain that we should do something to find a price tier that's lower than the existing lowest price tier to broaden that accessibility.

The company is looking for "the right set of features at the right price point in a way that the consumer can relate to," added Peters. The experience needs to be "natural and intuitive to the consumer." Peters noted that rolling out a lower price tier will likely be especially effective for member growth in India.

The success of bundled deals

One way Netflix adds new subscribers is by bundling its service with pay-TV offerings or cellular service offerings. Peters indicated bundled offerings are not only working well but also represent a key growth area for the company.

[W]hile these bundled deals are great, they're performing quite well for us and we want to expand them, it's also, I think, relevant to note that, as a fraction through all those channels of the total sign ups we do in any given quarter, in any given year, it's still quite small relative to our organic channel of people signing up with us directly. So we'll see more and more of those and I think it's a nice supplemental channel that accelerates our growth...

What about movie theaters?

When asked about where movie theaters may fit into the company's future, Netflix chief content officer Ted Sarandos said the company is focusing on what is in its control: producing and releasing great movies. But he said he wished its films could be available in theaters at the same time they are released to watch at home.

If I had my way, I would love to have the movies that are on Netflix to be available in 2,000 theaters at the same time that they're on Netflix. We just don't control the programming of those theaters.

Sarandos believes creating the best films possible will create opportunities for the company over the long haul.

[W]e have to focus on making great movies. And then anyone who's involved in the ecosystem of presenting movies and watching movies [will] take notice of those films. So that's what we're trying to do is just make undeniably great movies with undeniably great filmmakers.

Find out why Netflixis one of the 10 best stocks to buy now

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

Tom and David just revealed their ten top stock picks for investors to buy right now. Netflix is on the list -- but there are nine others you may be overlooking.

Click here to get access to the full list!

*Stock Advisor returns as of March 1, 2019

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Personal Finance Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More