Netflix Non-US Losses Hit $100m But Subscribers Increase

Netflix co-founder and CEO Reed Hastings Co-Founder and CEO Netflix at the launch of Netflix UK in January. The company has seen increased losses, but also growing subscribers. Photograph: Gareth Cattermole/Getty Images for Netflix

Losses at Netflix’s operations outside the US ballooned to more than $100m (£62m) in the first quarter, as the impact of its launch in the UK & Ireland hurt financially but fuelled growth of 1.2 million subscribers.

Netflix reported a global loss of $5m as its US operation, which accounts for 88% of of its 26m subscribers and 95% of revenues, balances the financial damage of its international expansion programme.

The online media provider, which made $60m in profit in the first quarter of 2011, was pushed into a global loss in the first three months thanks to its launch in the UK & Ireland on 9 January.

This pushed losses at its non-US operations from $60m in the fourth quarter of 2011 to $103m in the three months to the end of March.

However, subscriber numbers to its international services, which are available in more than 40 markets outside Netflix’s home market of the US, grew 65% from the previous quarter to 3.07 million by the end of March. Of these, 2.41 million were paid subscribers; the remainder of users are on free trial deals.

Revenues at the international operation grew by 48% to $43m.

Given that between the third and fourth quarters of 2011 international subscriber numbers grew 25% and revenues grew by 26% – versus respective growth rates of 65% and 48% between the fourth quarter of 2011 and the most recent quarter to the end of March – Netflix said that the UK & Ireland operation was the largest driver of growth in international members.

Read the whole story: theguardian