LOS GATOS, CA – Netflix appears well on its way to its stated goal of achieving “must have” status in most households, adding a record 13.0 million new members in 2014 and more than doubling its profits.
The online streaming giant said late Tuesday that it ended the year with a global total of 57.4 million members, up from 44.4 million at the end of 2013, and expects to end Q1 2015 with 61.4 million global members as it continues to push its slate of original content and launch in new countries.
For the fourth quarter ended December 31, 2014, revenues were $1.48 billion, up from $1.12 billion during the same quarter in 2013, while net income of $83.4 million was almost double the $48.4 million reported for the same period a year earlier.
Netflix ended 2014 with $5.50 billion in revenues, up from $4.37 billion in the year prior, while net income grew to $266.8 million from $112.4 million in 2013.
The company generated $1.31 billion in total streaming revenue for the quarter, up from $962 million year-over-year, and now has 57.39 million total streaming subscribers, of which 18.3 million are international subscribers. A breakdown of the number of Canadian Netflix subscribers was not specified in the results.
“Our international segment is growing very nicely with net adds of 2.43 million members in Q4, compared to 1.74 million a year ago. Our initial set of markets (Canada, Latin America, the UK, Ireland, the Nordic countries and the Netherlands) achieved contribution profitability in Q3 and continue to grow”, reads the note to shareholders that included the company’s financial results.
The note, signed by CEO Reed Hastings and CFO David Wells, credits the demand for Netflix in part to a overall shift from linear to Internet TV. It also confirmed plans to launch the service in Australia and New Zealand in late Q1, plus “additional major countries, in keeping with our global strategy” later in the year. Netflix is currently available in about 50 countries but aims to be in 200 in the next two years.
“Our international expansion strategy over the last few years has been to expand as fast as we can while staying profitable on a global basis”, continues the note. “Progress has been so strong that we now believe we can complete our global expansion over the next two years, while staying profitable, which is earlier than we expected. We then intend to generate material global profits from 2017 onwards.”
Netflix also pledged to continue to grow the percentage of its content spending dedicated to original programming for the next several years, noting that its originals cost it less money, relative to its viewing metrics, than most of its well known licensed content created by the top studios. It will offer 320 hours of original series (new and returning), films, documentaries and stand-up comedy specials this year, triple the amount of original programming released in 2014.
“We are also pioneering offering new high-quality video formats, delivering UHD-4K for House of Cards and Marco Polo”, the note added. “Soon we will be offering High Dynamic Range video (HDR) which captures and renders pictures with more realistic peak brightness in the highlights, and may be a more significant step forward in viewing pleasure than UHD-4K. We will start building our library to deliver in HDR as new TVs become available from several manufacturers this year.”
