Netflix sees international growth, UK launch “very successful”

Online video streaming service Netflix added 1.35 million international subscribers in the last twelve months. This comes after launches across  Latin America and the UK and Ireland and means that the company has a total of 1.86 million international streaming subscribers.

“Our UK and Ireland launch at the beginning of the month was very successful, and we’re seeing faster member growth than we did when we launched Canada. As our membership in the UK and Ireland grows, we’ll be able to invest more and more in content,” said Netflix CEO Reed Hastings.

Hastings admitted that competition in the UK was tough, particularly competing against pay TV service BSkyB. However, he warned that it would attempt to steal value Hollywood output deals from the News Corp-backed service when they came up.  “In the UK our long-term competition will likely be Sky Go offering Sky Movies and Sky Atlantic on-demand.  Sky Atlantic is mostly HBO Originals content, and Sky Movies is one channel with the Pay 1 movie output from all six major US movie studios.  We believe we will compete very effectively against Sky Go, given our advantages of being an unbundled low-priced offering with broad content that is purely on-demand, and personalised. Over the coming years, we hope to be able to grow large enough to outbid Sky for one or more major studio output deals, as we did this year for MGM,” he added.

Netflix expects to spend up to 40% of its overall programming budget on original content in the US and internationally. “HBO spends about one third or 40% of their budget on original and the rest on already produced movie content. So that would be the high watermark.”

This comes as the company announced its fourth quarter financial results, which saw it increase revenue by 47% over the year to US$876 million (€560 million), although it posted a fall in net income of 13% as a result of its latest international launches. International revenue rose to US$29 million with a loss of US$60 million.