Netflix Q2 profits double

Netflix Q2 profits double to $71 million while revenues from its streaming content service increased by almost 50% to $1.2 billion, compared to Q2 2013.

The company’s international segment is growing rapidly, its own content is winning awards, and the push for net neutrality was expressed in a letter to shareholders.

The California-based provider of on-demand Internet streaming media now has fifty million active users in more than 40 countries. During the second quarter 1.69 million users were added.

The company’s US member base jumped to more than 36 million. It predicts that for the next quarter there will be about 1.3 million new customers in the US (compared to Q3 2013).

Netflix international numbers growing fast

Outside the United State, there were 13.8 million customers at the end of Q2 2014, seventy-eight percent more than in the same quarter last year. In September, the service will be launched in Luxembourg, Belgium, Switzerland, Austria, France and Germany.

Regarding its breaking into the Western European market, Netflix wrote:

“This launch into a market with over 60 million broadband households will significantly increase our European presence and raise our current international addressable market to over 180 broadband households, or twice the number of current US broadband households.”

The company added that its European expansion this quarter will add new expenses to the segment, so it expects to report a loss of -$40 million for the international segment in Q3 2014.

Netflix Q2 2014 Financials

(Data source: Netflix Inc.)

Netflix’ own shows proving popular

Netflix has sought to revolutionize TV viewing by commissioning original content for its streaming video service and taking established brands like HBO head on.

Its own shows, such as Orange is the New Black and House of Cards have attracted millions of viewers.

In 2013, Netflix’ original shows were nominated for 14 Emmy TV awards and won three. In 2014, it has 31 nominations.

Netflix fighting for net neutrality

Recently, however, it has been in bitter disputes with major internet service providers, such as Verizon, accusing it of deliberately slowing down its service when Verizon customers are watching its shows.

Verizon says Netflix’ streaming service is unreliable because it chooses to use a mish-mash of cheaper connection routes.

Last week, a Netflix provider, Level 3, accused Verizon of accidentally admitting it is, in fact, slowing down connection speeds.

Reed Hastings, CEO of Netflix, is strongly opposed to Comcast’s proposed $45 billion acquisition of Time Warner Cable (TWC), saying it will lead to a monopolistic over-control of the industry.

In a letter to shareholders, Mr. Hastings and CFO David Wells wrote:

“Our focus on strong net neutrality, including interconnection, is about preventing large ISPs from holding our joint customers hostage with poor performance to extract payment from us, other Internet content firms, and Internet transit supplies, such as Level 3 and Cogent.”

“Our policy goals are for the FCC to not sanctify paid prioritization, and for the DOJ/FCC to block the merger of Comcast/TWC, or at the very least, to require as condition to approving the merger that the combined entity be prevented from charging for interconnection.”

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