On January 17, Netflix raised its subscription fees by $1 to $2 following an ambitious decision to invest in a wider range of programs and shows.

The move comes after the company decided to increase the yearly compensation of Netflix chief content officer Ted Sarandos to $31.5 million, making him one the highest paid producers in the U.S.

Has the Plan of Netflix Worked Out?

The massive increase in investment in content has paid off for Netflix as the company had more than 58 million subscribers in the U.S. alone as of last quarter.

Netflix was said to have around 137 million global subscribers several months ago, which has put the firm close to meeting its 147 million global subscriber target it established in the third quarter of 2018.

Many analysts including Michael Olson at Piper Jaffray have expressed optimism toward the highly anticipated earnings report release of Netflix on Thursday.

Based on the numbers that were released in last fall, analysts generally believe that the company will be able to surpass Wall Street expectations, becoming the first internet company to do so in 2019.

Previously on January 11, a Morgan Stanley strategist Mike Wilson said that the sentiment in the U.S. stock market was extremely bearish due to the earnings revisions made by companies in the likes of Apple.

Although investors did expect many companies to revise their earnings reflecting a decline in profits, Wilson said that the magnitude of the revisions threw investors off.

He said at the time:

While Apple maybe isn’t a surprise that they missed, the magnitude of it was a surprise. While Skyworks isn’t a surprise, that’s not necessarily good news. Our view is that the rolling bear market that happened last year is going to be a rolling bottom. Not everything is going to bottom at the same time but my guess is it’s going to be first in and first out. The stuff that let us in will probably lead us out.

If Netflix surpasses analyst expectations during a period in which the popularity of its services is rising rapidly due to the success of its films including Bird Box, the stock price of the company could surge in the short-term.

In anticipation of its earnings report, since December 24, the stock price of Netflix has increased from $233 to $351, by 50 percent.

Big Hit: Bird Box

According to a report released by Variety, Bird Box was viewed by 45 million viewers in the first week of release, at least by 35 percent of the global viewership of the platform.

Bird Box, the biggest hit of Netflix to date, has established a precedent for all future films on the platform. Some have suggested that the high numbers generated by the film will ease the process of obtaining more funding to introduce more high profile films and programs in the months to come.

Featured image from Shutterstock. Chart from TradingView.com.