Save your FREE seat for Streaming Media Connect this August. Register Now!

Netflix Posts Strong Subscriber Numbers, Now Bigger Overseas

Article Featured Image

SVOD leader Netflix wowed Wall Street yesterday with strong Q2 subscriber numbers. The second quarter is usually a weak one for streaming, and analysts were expecting new customers to rise by 3.2 million. Instead, Netflix added 5.2 million new subs. Debuts of strong original programming, including the latest season of House of Cards and new show 13 Reasons Why appear to have given the company a boost.

This growth marks an important milestone for Netflix, as it now has more subscribers overseas than in has in the United States. Succeeding across the globe is critical for the company, as it nears the subscriber saturation point at home. It now counts 52.03 million customers abroad and 51.92 in the U.S. Of the 5.2 million added this quarter, 4.14 million were non-U.S.

Revenues rose 32 percent to $2.8 billion, with Q2 profits of $65.6 million (up nearly 60 percent year-over-year). The good news gave Netflix's stock a 10.4 percent jump yesterday in after-hours trading.

Not everyone thinks the Netflix celebrations are appropriate: Mike Milligan, senior director for Limelight Networks, says the emphasis should be on customer loyalty, not customer acquisition.

"There’s no doubt that the most significant piece of Netflix’s earnings is its growth in subscribers, exceeding expectations with 5.2 million added over the last quarter," Milligan says. "But Netflix’s growing audience is no longer something to celebrate—in fact, it should be expected as more people get sick of their cable companies and inevitably decide to cut the cord. As the streaming industry in the U.S. becomes increasingly saturated, it’s becoming less about onboarding new subscribers and more about retaining them with new kinds of content and solid viewing experiences that keep viewers engaged and loyal."

One question now is whether or not Netflix's original content strategy is sustainable. The company currently spends $6 billion per year on original content.

Netflix's DVD-by-mail business is slipping: It declined 17.3 percent year-over-year to $114.7 million, comprising 4.2 percent of total revenue.

Streaming Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues
Related Articles

2018 Will Be Netflix's Best Year Yet; Headed for 201M Subs by '23

Strong demand outside the United States—especially in Asia Pacific—will propel record growth at Netflix, forecasts Digital TV Research,

Disney Pullout Could Be Trouble for Netflix; 19% Likely to Cancel

When Disney removes its movies from Netflix in 2019, one-fifth of Netflix subscribers could decide to leave, according to a poll conducted by Fluent.

Disney Takes a Majority Stake in BAMTech, Ends Netflix Deal

Marvel and Disney titles to leave Netflix as Disney revs up to launch two different streaming services: one for sports and one for entertainment.

How Netflix and Amazon Are Changing the Indie Movie Business

The leading subscription services are flush with cash, and they're eager to buy hot titles on the festival circuits. For first-time directors, that often means trading a theatrical release for a guaranteed payday.

Netflix, Amazon, and Hulu Rule: 59% in U.S. Have a Subscription

When deciding on a streaming video service, Americans look to the big three first, with few ignoring them in favor of niche content providers.

Netflix Will Grow to 128M Global Subscribers by 2022, Up 44%

Despite being locked out of China—the world's largest market—Netflix shows impressive foreign growth. But a new Russian law could spell trouble.

Amazon, Netflix, and More Go Global With the Cloud

At NAB, execs from Amazon, Netflix, 20th Century Fox, and Warner Bros. shared their insights into how virtualized workflows in the cloud are helping them meet international demand