Netflix international subscribers outnumber US after strong Q2

Netflix passed the 100 million-member mark and now has more international than US viewers, in a quarter that saw it surpass customer addition forecasts.

The subscription video-on-demand giant added 5.2 million new users globally in Q2, beating its prediction of 3.2 million and setting a second quarter record for net additions.

Netflix said it had underestimated the popularity of its programming, which led to “higher-than-expected acquisition across all major territories”, with new sign-ups for the first six months of the year now up 21% compared to H1 2016 at 10.2 million.

US net additions of 1.1m represented Netflix’s highest level of Q2 sign-ups since the second quarter of 2011, while internationally it added 4.1 million members in the quarter.

“Our streaming membership grew more than expected, from 99 million to 104 million, due to our amazing content. We also crossed the symbolic milestones of 100 million members and more international than domestic members. It was a good quarter,” said Netflix in a letter to shareholders.

The OTT provider said that its international segment now accounts for 50.1% of its total membership base. It added that international revenue rose 57% year over year, excluding a US$23 million hit from foreign exchange rates.

“We are making good progress with our international expansion as improving profitability in our earlier international markets helps fund significant investment in our newer territories,” said Netflix.

“As a result, we expect positive international contribution profit for the full year 2017​, at current F/X exchange rates. This would mark the first ever annual contribution profit from our international segment.”

Discussing competition in the market, Netflix cited “large-cap tech companies” like Amazon and a range of SVOD players from around the world – like Blim, Globoplay, FilmStruck, Hooq, iflix and Stan.

“We are all co-pioneers of internet TV and, together, we are replacing linear TV. The shift from linear TV to on-demand viewing is so big and there is so much leisure time, many internet TV services will be successful.”

Overall Netflix’s second quarter revenues climbed 32% year-on-year to US$2.79 billion, while its net income increased 61% year-on-year US$65.6 million.

The company’s share price climbed by more than 10% in after-hours trading.