LOS GATOS, CA – Netflix added a record 3.3 million new streaming members in the second quarter as it continues its quest to make the service available throughout the world by the end of 2016.
The online streaming giant said late Wednesday that it gained 900,000 new customers in the U.S., where it now boasts 42.3 million, and added 2.4 million in its international markets to reach 23.25 million customers. The company generated $1.48 billion in total streaming revenue for the quarter, up from $1.15 billion year-over-year, and now has 65.55 million total streaming subscribers.
Netflix credited the higher than anticipated level of acquisition to the strength of its original programming slate, which in Q2 included the first seasons of Marvel’s Daredevil , Sense8, Dragons: Race to the Edge and Grace and Frankie, as well as season 3 of hit Orange is the New Black.
A note to shareholders that included the company’s financial results said that “nearly 99% of Netflix members have engaged with Netflix original content, another indicator that we are on the right path.”
With a global content spend approaching $5 billion in 2016 on a P&L basis (over $6 billion cash), Netflix pledged to devote more investment to original series, documentaries and stand-up, and also move in to the original feature film business. The first of its films, Beasts of No Nation, will be available to all Netflix customers and in select theaters in October, while War Machine, starring Brad Pitt, is scheduled to debut on the service and in select theatres next year.
For the period ended June 30, 2015, revenues were $1.64 billion, up from $1.34 billion during the same quarter in 2014, while net income of $26.3 million fell from the $71.0 million reported for the same period a year earlier.
“International revenue grew 48% year over year, despite an -$83 million impact from currency (+5% ASP growth x-F/X)”, continues the shareholders note. “As we expected, international losses increased sequentially with a full quarter of operating costs in AU/NZ (Australia/New Zealand). We expect this trend to continue in the second half as we launch additional markets (Japan in Q3 and Spain, Italy and Portugal in Q4) and prepare for further global expansion in 2016, including China as we continue to explore options there.”
The note, signed by CEO Reed Hastings and CFO David Wells, added that Netflix’s global expansion has resulted in a focus on “adding more languages, optimizing our personalization algorithms for a global library in local markets, and expanding support for a range of device, operator and payment partnerships. We are also placing a greater emphasis on optimizing for mobile, which is the main means for Internet access in many emerging markets where we will be expanding in the future.”
