Netflix beats expectations as overseas subscribers soar

Jul 18, 2017 | Content marketing, E-commerce and E-retailing, Online video

Netflix now has more subscribers outside the US than in its home market, helping the online video service outstrip expectations for audience growth for the second quarter of 2017. Netflix’s subscriber numbers grew by 5.2 million in the three months ended June 30, almost 63% ahead of its expectations, causing shares to jump nearly 11% […]

Netflix now has more subscribers outside the US than in its home market, helping the online video service outstrip expectations for audience growth for the second quarter of 2017.
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Netflix’s subscriber numbers grew by 5.2 million in the three months ended June 30, almost 63% ahead of its expectations, causing shares to jump nearly 11% in after-hours trading and hit an all-time high.
The streaming service had expected to add 3.2 million subscribers in the period, but said it had “underestimated the popularity of [its] strong slate of content” and now had around 104m subscribers worldwide.
Of those new subscribers 1.1 million were in the US and the remaining 4.1m were international subscribers.
More than half of its total membership base is now international, and Netflix expects its first ever annual contribution profit from the international segment this year, it said.
The second quarter update comes a week after 27 of Netflix’s original programs received nominations in the Television Academy awards, with 91 Emmy nominations.
Netflix said this was nearly double last year’s tally. Among its shows that have proved popular are Master of None, The Crown and Stranger Things, all of which were nominated as best series contenders.
The group said the internet “may not have been great for the music business due to piracy”, but said it had been “incredible for growing the video entertainment business around the world”.
Signaling an expansion from its TV roots, Netflix said it would “reinvigorate the film business”, announcing plans to release 40 feature films this year, ranging from “big budget popcorn films to grassroots independent cinema”.
In the three month period, revenue grew 32% year on year to $2.79bn (£2.14bn), though diluted earnings per share dipped from the prior quarter, to $0.15 from $0.40, due to the timing of content releases. This was in line with its forecasts.
Netflix said its third quarter guidance assumed “much of this momentum will continue”, though said it was “cognisant of the lessons of prior quarters when we over-forecasted and there was lumpiness in net adds, likely due to demand being pulled forward”.
Key stats about Netflix from Verto Analytics
All data is based on usage among people aged 18+ between March 2017 and June 2017.

  • In the UK, Verto estimates Netflix saw an additional 1.8 million visitors between March and June
  • In the US, Netflix saw particularly strong growth in attracting males (up 14%) and 35-44s (up 27%), although it saw a 19% decrease in 18-24s

US vs UK differences

  • Netflix has much greater reach in the US (reaching 23.6% of US online adults) than in the UK (14.1%)

US viewers are much more engaged than UK viewers:

  • They spend nearly twice as long on Netflix (183 mins a month vs 97 mins)
  • They’re more regular users: 19% of monthly users are using it on any given day vs 14% in the UK
  • The US audience is much more female orientated (52% are female) than the UK (42%)
  • The UK audience tends to be younger. For example, 25% of Netflix’ UK adult audience is 18-24, nearly twice as high as in the US (14%)

 

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