Netflix content spend per sub down to $23 as profit accelerates

Pressure? What pressure? Netflix’s third quarter results delivered a story of profitability – temporarily easing investor qualms over the company’s famously high original content investments and setting a bar for the impending cash-rich big hitters. Net income surged 65% year on year to $665 million from revenues of over $5.2 billion, a 31% annual increase. Like any business, marching towards increasing profit margins has not been an easy journey for Netflix, as we have plotted in the chart below. The graph shows a clear spike in net income over the past two years, correlating with an injection of additional streaming asset spend. The concern however is that the gap between the two is widening, although you cannot argue against the…