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Netflix Now Has 81 Million Subscribers, But Growth Outlook Not So Good

Photo of family watching Netflix
Sean Fang Thu, 21/04/2016 - 18:07

Netflix's has announced new subscriber numbers showing the company's worldwide expansions plans are working, with 42% of the company subscribers now residing outside of the US. But at the same time, the company has warned future growth will be limited, now that the U.S. market is becoming saturated.

The streaming giant launched its massive global expansion late last year, expanding to 130 new countries. The latest announced results marks the first full quarter since the expansion was rolled out, and the expansion has proved to be a success, with the company announcing 6.74 million new subscribers. Out of these new subscribers, only 2.23 million were from the U.S. The last quarter also saw tremendous overseas growth, with four-fifths of the 5.59 million new subscribers also coming from outside of the U.S.

But despite the last two quarters of solid growth, Netflix is estimating slower growth in the upcoming quarter, While the second financial quarter is usually a quieter one, Netflix's forecast of 2 million overseas subscribers, and 500,000 new US subscribers, is far below market expectations (which had predicted 3.45 million new overseas subscribers) and below that from the same quarter last year (3.30 new subscribers globally).

Netflix says last year's better figures were largely one-off events, especially noting that the Australian and New Zealand launches had helped to produce a growth spike in 2015 Q2.

Netflix's international expansion has also been costly. The company reported $1.96 billion in revenue for the quarter, but only $49 million in operating profit, down from $92 million for the same period last year, with the difference being mostly attributed to the cost of the expansion.

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