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Netflix ramps up international plans

Netflix will launch in another international territory in early 2012 and will roll out its TV and movie rental service in several other international markets thereafter.

On the company’s first-quarter conference call, CEO, Reed Hastings, said that it is reasonable to assume that Netflix could enter as many as two international markets or more per year starting from 2012. “If we continue to see the kind of success that we’ve seen in Canada, we think it would be very smart for us to move at least that fast, yes,” he said.

Netflix launched in Canada last fall and reported 800,000 subs in the country in its first-quarter results. The company has previously said that Canada is a test-bed for its international plans and has now confirmed that its experience of launching there has convinced it there is appetite for the service in other countries.

It expects to hit breakeven in Q3 in Canada and report an overall international operating loss of US$50-70 million (€34-48 million) in the second half of this year. This range is higher than the previous forecast of a US$50 million loss. The bulk of the costs relate to clearing rights and inking deals with the studios and other distributors. Netflix said it has already made some early content commitments for its new international launches.

In the US, Netflix has 22.8 million subscribers. It reported first-quarter revenue of US$706 million, a 43% year-on-year increase. Operating profit was US$113 million compared with US$36 million a year earlier.

International revenue was US$12 million and the operating loss was US$11 million. It is too early to make year-on-year comparisons for the international segment, but revenue in the previous quarter was US$4 million and the operating loss was US$9 million.  

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