Netflix beat Wall Street estimates to add 5.2 million subscribers in the June quarter.
For the first time ever, Netflix has more non-US subscribers than those in its home market. The video-streaming giant ended the June quarter with 5.2 million new subscriptions, of which 4.14 million came from overseas markets, Reuters reported. Now, Netflix has 52 million subscribers abroad, and 51 million at home. The company managed to beat Wall Street estimates (3.2 million), and expects its overseas business to turn a profit for the first time in 2017. ”All throughout the West, in Latin America, North America and Europe, we’re doing very well,” Netflix CEO Reed Hastings said on a webcast.
Riding on the viral popularity of shows like 13 Reasons Why and House of Cards (latest season), Netflix managed to pull in new customers in what is typically the slowest quarter of the year. It further expects to add 3.65 million international subscribers in the July-September period. By the end of 2017, the video-streaming service will reach 20 percent of broadband households in five of its largest markets outside the US, according to brokerage firm Instinet. ALSO READ: Netflix surpassed cable TV users in America for the first time this quarter: Statista
However, while Netflix continues to add subscribers quite easily, it’s cash-burn shows no signs of slowing down. The company expects to burn roughly $2-2.5 billion in cash this year, and is unlikely to generate actual cash for “many years.” This essentially means that Netflix is funding its international expansion through debt, and there will come a time when it will have to increase subscription prices to repay that debt to investors. During the just-ended quarter, Netflix raised $1 billion to fund its original programming — that also includes its first series (Sacred Games) in India. ALSO READ: 10 emerging trends from India’s online video consumption boom
Netflix officials suggested on the webcast that Asia continues to be a challenge for the company as customers have varied tastes and consumption habits. To add to that, there’s increasing competition from Asian video-streaming services like Hooq, Iflix, and Hotstar (which leads the market in India). There’s also Amazon Prime Video, which simultaneously launched in 200 markets last year, and is making steady strides in India. Netflix won’t have it easy here.