Netflix reported a strong Q3 ’17, growing domestic subscribers by 850K and international subscribers by 4.45 million. Those compared to Q3 ’16 of 370K domestic and 3.2 million international. Adding 5.3 million subscribers in a single quarter, off a base of approximately 100 million is certainly nothing to sneeze at. But yesterday's earnings call with company executives once again raised the question of what’s actually driving the growth? Netflix itself has offered ambiguous answers.

In this quarter’s call, CFO David Wells said that “base force that really is the strongest force is the continued adoption of Internet TV and entertainment and that tends to drive the lion share of our net additions.” With regard to the role that Netflix’s content plays, Wells continued, “When we try to explain the quarter-to-quarter perturbations or some of the lumpiness in our net additions, we tend to use explanations that sort of focus on the incremental, which could be content slate or a particular title that had some notable strength.”

That’s just what Netflix did in Q2 ’17, in its letter to shareholders explaining the robust subscriber growth: “we underestimated the popularity of our strong slate of content which led to higher-than-expected acquisition across all major territories.” But Netflix didn’t say anything about the rising tide of Internet TV adoption being a contributor at all.  

Back to yesterday’s call, Wells summed up by saying, “…when we try to explain quarter-to-quarter changes it becomes a little bit harder and it’s hard even for our own team to ascribe certain incremental growth and we do the best we can.”

I think that’s a very honest assessment and points to how hard it is for even a company of Netflix’s size to pin down precisely how big the shift to online viewing actually is. To its credit, Netflix has long been relatively open about trying to publicly explain its business, even when it’s not 100% sure.

Still, the murkinesss around what actually drives Netflix’s subscriber numbers and what role original content plays is important because Netflix keeps spending more and more on the bet that ultimately that’s what will matter for both retaining existing subscribers and attracting new ones. External research further cloudies the picture. Earlier this year 7Park Data's said 85% of Netflix's U.S. streams are licensed, not original. Earlier today, Survey Monkey released research saying that 57% of SVOD subscibers do so to watch already-released TV shows and movies rather than originals.

Q3 ’17 was no exception, as Netflix once again bumped up its forecast for original content spend to the $7 billion to $8 billion range, including a huge ramp-up for moves, now projected to total 80 releases next year. And total commitments at the end of Q3 were $17 billion.

Netflix is clearly surfing on top of the surging popularity of online video adoption, but it’s investing specifically in original content to differentiate itself. While the numbers are eye-popping, in theory, Netflix’s content initiatives should increase in their success. The company pays creators top dollar and offers global reach. Meanwhile the more data it has on what’s actually being watched, the smarter it should be (theoretically) about which future projects will also likely to succeed. It’s a nice virtuous circle.

Netflix’s run over the past few quarters says a lot about how viewers’ behaviors are changing. Netflix has clearly instigated this change and is continuing to benefit mightily from it. At some point however, trees don’t keep growing to the sky and growth will slow. That’s when the true value of Netflix’s billions of dollars of content investments will be understood.