Internet video streaming company Netflix announced this week that it reached the 1 million-member milestone in the UK and Ireland within seven months, faster than any other territory in which it has launched.
Netflix entered the UK and Irish markets in January, competing head-to-head with Amazon.com?s U.K.-based online video company Lovefilm and triggering a price war. Nor is Lovefilm Netflix?s only regional competitor. In July, BSkyB launched its own online streaming service, Now TV, telling investors that it would spend ?30 million ($46.4 million) over the next 12 months supporting the new product.
However this competition plays out over the next year, the Silicon Valley-based company has bragging rights for now. ?This membership milestone is evidence that Netflix has rapidly gained popularity in the UK and Ireland,? said Netflix CEO Reed Hastings in a statement.
Netflix has more than 30 million members in the U.S., Canada and Latin America. Last week it announced that it would arrive in Norway, Denmark, Sweden and Finland later in 2012. This international expansion comes at a time when the service has hit a plateau in its home market.
Over the past year, Netflix has also been aiming to boost the number of subscribers who stream movies and television episodes via the Internet, versus those who rent DVDs by mail. In the second quarter of 2012, announced a month ago, it added 1.1 million steaming subscribers worldwide, while dropping 850,000 DVD customers. Given this week?s milestone, the U.K. and Ireland accounted for much of that growth. But while revenue rose 13 percent from last year, the second-quarter results also included a 91 percent drop in net income. During the first quarter, the company lost $4.6 million, attributable in part to expenses associated with the U.K. expansion.
Growth in the U.S. appears to have peaked. Netflix added 420,000 customers in its home market in the second quarter, compared to 1.8 million at the same time last year.
As Netflix looks for growth abroad, it continues to tweak its platform. Last week, it launched a feature it calls ?post-play,? which minimizes the credits and tees up the next episode to start playing within 15 seconds. This caters to the growing class of ?binge viewers? (discussed in this Wall Street Journal article) who watch multiple episodes of a show in one sitting.
Jonathan Tombes is Contributing Editor for Videonet. He began writing for Videonet in 2011, having covered evolving voice, video and data technologies for nearly twelve years. From 2005 to 2010, he served as editor of Communications Technology, which he joined in 1999. Since leaving CT, he has worked as a consulting editor for more than a dozen technology suppliers. Earlier in his career, he was a researcher at a public policy institute in Washington, DC. In paper submitted to a business school professor many years ago, he once described Steve Jobs a cult leader; he now admits that his Apple devices are sometimes his favorite video displays.
Source: http://www.v-net.tv/netflix-hits-1-million-in-uk-ireland/
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