Netflix April 16 said it added record 7.4 million new subscribers in the first quarter (ended March 31) – topping Wall Street estimates of 6.5 million. The service added 5.4 million subs internationally, compared to 1.96 million (1.45 million forecast) in the United States.
International operations now account for 50% of revenue and 55% of memberships. Netflix has 125 million members globally. Netflix added 1.98 million domestically in the fourth quarter, underscoring the service’s maturity in the U.S.
Financially, the SVOD service generated $290 million net income on revenue of more than $3.7 billion. That compared to net income of $178 million and revenue of $2.63 billion during the previous-year period.
Netflix generated $56.3 million contribution income from its legacy by-mail disc rental unit. Revenue topped $98.7 million, compared to revenue of $120.3 million during the previous-year period. The business ended the period with more than 3.1 million subscribers, down from 3.94 million subs last year.
In the shareholder letter, CEO Reed Hastings and CFO David Wells reiterated Netflix would spend upwards of $8 billion on original content in 2018.
Scripted original series debuts in Q1 included coming of age story The End of the F***ing World and sci-fi thriller Altered Carbon as well as returning seasons of “Marvel’s Jessica Jones,” “Grace and Frankie,” “Santa Clarita Diet” and “A Series of Unfortunate Events.”
“Last year, we expanded our efforts in original programming to unscripted shows across several genres. Our output in this area is now comparable to similarly-focused domestic cable networks,” Hastings and Wells wrote.
The executives said the surprise launch of sci-fi movie, The Cloverfield Paradox on Super Bowl Sunday underscored a “tight” coordination between original film, product, marketing and PR teams.
“The event showcased how a big branded film can be marketed and delivered to consumers instantaneously across the globe without a wait for the theatrical window,” Hastings and Wells wrote.
Netflix continues to generate controversy releasing original feature films worldwide concurrent with any theatrical distribution. The service is skipping the Cannes Film Festival competition since its movies in France must first be screened theatrically for 36 months.
“We would never want to do that to our French members,” wrote the executives.
Hastings and Wells heralded Netflix’s first Oscar win for bike racing doping documentary Icarus.
“We’re thrilled when the creators with whom we partner are recognized for their exceptional work,” they wrote.