SAN FRANCISCO — Orange is the New Black may have helped make Netflix the new HBO with investors.
Netflix's on Monday reported a U.S. paid subscriber leap that puts the streaming service squarely ahead of Time Warner's HBO, according to analyst estimates.
The advances by Netflix spotlight a winning formula around original programming to attract new membership. Original titles such as Orange is the New Black and its Emmy-winning House of Cards were big attractions for subscribers. Binge viewing of such series titles have turned Netflix into a hits maker for a new generation.
"We went to a second season of Orange Is the New Black early because we had seen all 13 episodes (and) were highly confident in the forecast models and the quality of the show," Netflix Chief Content Officer Ted Sarandos said on a conference call.
Netflix's U.S. paid subscribers jumped to 29.9 million in the third quarter, up from 28.6 million in June, passing HBO's 28.7 million, according to market researcher SNL Kagan
Wall Street investors applauded Netflix's programming results. Shares of Netflix rocketed 10%, at $391.39, in after-hours trading on the news.
Overall membership at Netflix soared in the quarter from a year ago. Netflix reported a more than 33% jump in members from a year ago, at 40 million compared with less than 30 million in the prior period.
"I think Orange was a great success for us," Netflix CEO and founder Reed Hastings said on the call. "We're trying to do more great content like Orange."
Netflix quarterly results beat estimates, top to bottom, according to a survey of forecasts from Thomson Reuters. Company net income popped 315%, at $31.8 million, compared with a year ago. Revenue nudged past estimates by $6 million on just over $1.1 billion in the quarter. Earnings per share of 52 cents beat analyst forecasts for 49 cents in the period.
Netflix's international audience jumped by 1.4 million new members from a year ago, driven by Nordic and Netherlands expansion efforts, the company said.
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