Netflix pauses international launches as profits stack up

Despite the doubters, US online video service Netflix has met its stated ambition of returning to profitability in 2012 after investing large amounts in establishing itself in 40 countries around the world, and confirmed that it does not have any more international launches on the cards for the first half of this year at least.

The company has posted a US$ 19mn net profit for 2012 on revenues of US$ 3.6bn, thanks to strong performances by its online streaming services in the US and other markets – although these were partially offset by worsening results for its DVD-by-mail business.

Domestically, the company added 5.48mn new customers for its streaming service over the course of last year, with 2.05mn of those added in the last quarter alone, to reach a total of 27.15mn.

Internationally, Netflix considerably improved its customer base over the course of 2012, adding 4.27mn subs for its streaming services over the course of the year, with 1.81mn of those added in the fourth quarter, to reach a total of 6.12mn.

The number of customers leaving its domestic DVD-by-mail service has slowed but still reached 0.38mn in the fourth quarter of 2012, with the total number dwindling to 8.22mn by the end of December.

On the content front, Netflix developed several major original series over the course of 2012 which will debut this year, starting with all 13 episodes of ‘House of Cards’ in all markets on February 1st.

It is the international launches however which show just how bullish Netflix is feeling: CEO Reed Hastings writes in a letter to shareholders that the company is not planning any new launches before June 2013, but is evaluating several expansion markets for late 2013 or 2014.

On the intentions of new investor Carl Icahn, the Netflix chief exec is apparently none the wiser: “We have no further news about his intentions, but have had constructive conversations with him about building a more valuable company.”


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