CEO Hastings: Member growth is faster than in Canada
LONDON — As Netflix reported buoyant quarterly earnings on Wednesday, the company also revealed that its Jan. 9 launch in Blighty and Ireland had gone far better than expected.In a letter to shareholders, chief exec Reed Hastings said that in Blighty, Netflix was “seeing faster member growth than we did when we launched in Canada.” Hastings noted that as membership increased, the company would be able to invest in more content. Netflix, whose major competitors in the U.K. are Amazon-owned Lovefilm and BSkyB, has secured a raft of deals with content providers, including exclusive deals with Lionsgate U.K. and Momentum Pictures, which will see pics such as “The Hunger Games” and “Shame” streamed on the service. Hastings noted that long-term competition “will likely be Sky Go offering Sky Movies and Sky Atlantic on-demand.” “We believe we will compete very effectively against Sky Go given our advantages of being an unbundled, low-priced offering with broad content that is purely on-demand and personalized,” Hastings said. “Over the coming years, we hope to be able to grow large enough to outbid Sky for one or more of the major studio output deals, as we did this year for MGM.” Netflix’s international revenue for 2011’s fourth quarter was $29 million, which he said was in line with expectations. In the first quarter of 2012, Hastings added, “Combined investments in Latin America and the U.K. and Ireland will result in a total international loss of between $108 million and $118 million.” “In future quarters, we intend to increase our investment in the content libraries in each market, just as we have done in Canada since launch,” he added.
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