Netflix sees strong growth – but no more international launches in first half

Netflix says losses from its international business will get smaller, but it has no plans to roll out into new international territories in the short term.

The US-listed firm added 1.81 million international streaming subscribers in the fourth quarter to take its total international base to 6.12 million. The company added 2.05 million streaming subs in the domestic US market, taking its total thre to 27.15 million. Total paid subscriptions were 4.89 million in international markets and 25.47 million in the US market.

Netflix said it expected to see declining losses in its international markets this year as subscriber growth edges ahead of content spending. It expects a first quarter international loss of US$87 million (EUR65 million). The company does not plan to launch in additional international markets in the first half, but said it would evaluate “several expansion markets” for late 2013 or 2014.

Netflix highlighted the significance of recent deals including its agreement with Warmer Bros. that sees it licensing content direct from the producer rather than networks on which shows are aired. However, it said it was also seeing stronger competition in the domestic US market from services including HBO Go. With competition also emerging in the UK and Nordic territories, it said that its investment in original series would become more important over time.

Netflix posted US$101 million in revenues in international markets, giving it a net loss of US$105 million. US streaming revenues amounted to US$589 million, with a contribution profit of US$109 million.

Netflix’s domestic DVD rental business continued to decline, with total subscriptions falling by 380,000 to 8.22 million, of which 8.05 million were paying customers.
 Overall revenues for the company were US$945 million, giving it a net profit of US$8 million.

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