Netflix has vowed to re-animate its on-hold global ambitions by launching further into Europe this coming Q4, after it spent slightly less than expected on its UK and Ireland launch this January.
“Given our expected return to global profitability in Q2, and how well we’ve been received in the UK, we’ve decided to open an additional attractive European market in Q4 of this year,” the company said in its Q1 earnings disclosure.
When planning the expensive UK and Ireland launch amid the controversial company restructuring that saw it lose domestic customers in 2011, Netflix had warned the company would go in to the red, forcing it to freeze indefinitely plans to roll out in any more countries until profitability could be restored.
The company did not specifically report how many subscribers it has attracted in the UK and Ireland, citing “competitive reasons”, but said sign-ups in its first 90 days there exceeded those gained in Canada during the same period.
Growth in the latest countries, along with sign-ups in existing territories of Canada and Latin America, helped Netflix’s international subscriber base almost triple during Q1 to 3.07 million.
And Netflix hit its overseas targets. International revenue came in at $43 million. International losses hit $103 million, thanks to the costs of acquiring content and marketing itself to a new audience. That is huge outlay but still less than the up to $118 million Netflix had expected to lose on globalisation, thanks to “slightly higher revenue combined with lower than expected content, subtitling and marketing expenses”.
The company reiterated that it sees News Corp’s Sky Movies, which has exclusive subscription-window deals with six Hollywood studios, as its main competitor, and not Amazon’s Lovefilm.
Netflix reckons its Canadian operation will turn a profit this coming Q2, two years after launch, but reckons the UK, Ireland and Latin America will take longer.