Business News Roundup, Oct. 18
Netflix is testing the financial limits of its streaming video service as the rising cost of producing original programming pushes up subscription prices.
The latest reminder came Monday with the company’s third-quarter earnings report, which revealed that the Los Gatos company added 370,000 U.S. subscribers.
While the latest quarterly subscriber gain exceeded management’s modest projections, it fell far below the 880,000 U.S. customers that Netflix picked up at the same time last year.
Netflix fares far better overseas as it tries to diversify its video library to suit the tastes of 189 other countries.
Investors were thrilled with the international progress and the better-than-expected showing in the U.S. Netflix’s stock surged nearly 20 percent to $119.49 in extended trading.
The drop-off in U.S. subscriber gains underscores the delicate balancing act the company is trying to pull off as it tries to retain and attract customers while also financing an ambitious expansion overseas amid fierce competition from Amazon and HBO.
About 25 percent of the U.S. subscribers still covered by the 2014 rate freeze will have their prices raised by year’s end.
Netflix does not disclose how many of its subscribers cancel each quarter, but Wedbush Securities analyst Michael Pachter estimates that about 1 million U.S. households opened new accounts from July through September.
Visa Inc. on Monday named current board member Alfred Kelly Jr. as its president and CEO.
Drugmaker Pfizer said Monday that it will launch a less-expensive version of rival Johnson & Johnson’s blockbuster immune disorder drug Remicade.
Biosimilars are near-copies of biologic drugs, which are very expensive injected medicines that are “manufactured” inside living cells, rather than by mixing chemicals together.
Remicade, long J&J’s top-selling drug, is used to treat rheumatoid arthritis, psoriasis, colitis and other immune system disorders.