Netflix Posts Profitable Q4
Netflix announced today its fourth quarter results which came in higher than expected with a sum revenue totaling approximately $945 million bringing in a net income of $8 million due to its “contribution profit out-performance primarily in our domestic and international streaming segments.”
In general, Netflix saw a successful 2012, which the company says is expected to be outperformed in 2013 due to a number of reasons.
In Q4, Netflix’s domestic streaming added more than 2 million members, ending the year with a total of more than 27 million domestic Netflix users. The holiday was strong for Netflix because consumers were purchasing or receiving new electronic devices such as tablets and smart TVs. Other attributes of the domestic streaming Q4 was Netflix’s announcement of becoming the exclusive “Pay 1” provider for theatrical releases from Walt Disney Studio starting in 2016. Netflix also signed a deal with Warner Bros, to add popular TV shows such as “Revolution," and “The Following.”
For domestic streaming expectations in Q1 2013, Netflix stated that it expected additions to the service would rank slightly higher than Q1 2012’s additions of 1.7 million while Q2 will have fewer additions than Q2 of 2012 as it seasonally lightest quarter.
Internationally, Netflix saw growth of over 6 million international members in Q4 2012. Netflix saw growth specifically in Latin America, while in Canada the movie “The Hunger Games” debuted with “much success.”
A commitment Netflix is excited to introduce in 2013 is the debut of its original series on February 1st. Releasing all 13 episodes of “House of Cards” on the same day, Netflix members will have the “freedom to immerse themselves when and how they want in the world created by David Fincher and his stars Kevin Spacey and Robin Wright.” Netflix believes its publishing of original series will allow creators to concentrate on multi-episode story arcs as Netflix will be publishing “books” in comparison to “chapters” like on regular cable networks.
Another anticipated moment for Netflix, expected to increase its subscriber base in Q2, is the introduction of the 4th season of “Arrested Development” in anticipation of its upcoming movie. The series is returning due to a call from the series’ fans after the show was cancelled from Fox.
Finally, Netflix is committed to improving member streaming experience. “We are focused on creating an experience that delights our members and increases their engagement. Our large member base allows us to do more and bigger experiments, which enables us to learn what works best for our members more quickly than our competitors,” said Netflix in an official statement.