Netflix added 7.4 million global subscribers in Q1 2018, beating its forecast of 6.35 million.
Of its net additions, nearly 5.5 million subscribers hailed from outside the U.S., up from 3.5 million during the same quarter in 2017. Netflix now has more than 125 million subscribers worldwide, up from 98.75 million at the same time last year. The streamer said it expects to add an additional 6.2 million subscribers in Q2 2018, five million of which it expects will come from its international segment.
In the quarter ending March 31, the global streamer saw revenue of US$3.7 billion, up 43% year-over-year, due in large part to a 25% increase in average paid memberships and a 14% rise in average selling price.
In a letter to investors, Netflix reported that its international segment now accounts for 50% of its revenue and 55% of memberships.
Looking ahead, Netflix estimates it will spend between $7.5 and $8 billion on content across a variety of formats, with the company continuing to expand its efforts in original programming, including with non-English-language content. In a call with investors, chief content officer Ted Sarandos said the streamer has filmed local productions, with local producers, in 17 countries around the world and they expect that to grow going forward.
He pointed to series such as Portuguese-language sci-fi 3% as an example of the streamer’s commitment to local originals. “We are also seeing more examples of non-English content transcending borders. This quarter, La Casa de Papel (Money Heist in English-language territories), a Spanish-language heist thriller, became the most watched non-English series on Netflix ever,” the report states.
As for its film output, Sarandos touched on Netflix’s decision to pull out of the Cannes Film Festival. Cannes adopted a new rule this year that requires a French theatrical release of any films in competition at the festival. French law dictates that any film that is in French theaters cannot be on an SVOD service in the country for three years.
Sarandos noted that Netflix released 33 films in theaters last year, day-and-date with their Netflix releases, adding he believes that distribution model will become more accepted going forward.
“Defining distribution by the room you see it in is not the business we want to be in,” Sarandos said on the call.
On the marketing front, the company spent $479 million, up nearly 77% from the same quarter the year before. As it moves to create more original content, chief financial officer David Wells noted that the streamer will need to do more to promote its own titles. “As we create more and more of these titles that no one has heard of, we’re going to need to lean a little bit more on promotion and the website can’t do it all.”
From Playback Daily