Netflix has released its earnings call for Q4 2016 and the firm appears to be doing well as far as subscribers and business in the US is concerned.
The internet streaming service now has 89 million paying subscribers around the world. This figure was raised largely thanks to Netflix’s international release in 2016, a move which brought 13.7 million new paying subscribers to the service.
Revenue is also up to $8.2 billion (a 35% increase year-on-year) thanks largely to the firm’s domestic business.
Internationally however Netflix is still fighting an uphill battle.
The trouble is in the profits Netflix makes, or rather doesn’t make internationally. While international revenue totalled $3.2 billion in 2016 the operational and marketing costs that eat into that revenue mean Netflix lost $308 million because of its international business.
This is – to be fair – less of a loss than the firm saw in 2015 where internationally Netflix lost $333.3 million.
Thankfully its domestic business is still healthy and a profit of $1.8 billion means that losses are somewhat mitigated.
The firm says that it plans to invest heavily in the international business throughout 2017 with a view to improving losses “substantially.”
What geo-blocking?
Netflix attributes its substantial growth in 2016 to learning how to better match content with audiences.
This comes after a year in which Netflix clamped down on services which allowed users to spoof their geo-location and access content not available in their territories.
Netflix Originals such as Stranger Things, Marvel’s Luke Cage and The OA all had international releases and were acclaimed by critics.
Netflix says that it plans to invest a further $6 billion into projects tailored for a global audience this year.
“In 2016, we launched globally (excluding China) and made good progress. But there remains a lot to learn to make Netflix as popular abroad as it is in the US,” said the firm.
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