Netflix had a pretty good 2015, to a degree

20 Jan 2016

Netflix has revealed details on its 2015 performance, with a growing subscriber base outstripping concerns on profitability. Times are good.

Posting Q4 revenues of $1.82bn, which was up almost a quarter on the same time last year, Netflix’s 2015 details have pleased pretty much everybody, with shares surging on the back of impressive subscriber news.

International subscriber growth was over 4m, half a million more than some Wall Street estimates, with US subscriber growth coming in just below expected numbers, at 1.56m.

The success of original shows like House of Cards and, in particular, Making A Murderer, look set to see subscriber numbers skyrocket in 2016, too, with Q1 estimates at 6.1m net additions globally – for context, Q1 last year saw 4.88m additions.

This means that the gradual slowdown of subscribers in the US is largely being offset by international success, with increased subscriber numbers a necessity on the back of extensive programming obligations, which will be around $5bn this year.

So decisions like entering 130 new international markets two weeks back make sense. But account sharing could well hamper revenues, while increasing saturation.

In a survey by Strategy Analytics, 9pc of US Netflix users and 14pc of UK users use a subscription paid for by someone outside of their household.

Account sharing is most prevalent in France, with 25pc of Netflix users using a subscription that belongs to someone outside their household.

Indeed, profits of $43.2m were actually down from $83.4m the previous year.


Netflix image via Iculig/Shutterstock

Gordon Hunt was a journalist with Silicon Republic