Netflix ended the period Q1 2017 with a total of 98.7 million streaming memberships, consisting of 50.8 million in the U.S. and 47.9 million internationally despite its subscriber growth slowed in the last quarter.
In the period the platform added 5 million members, down from the 7 million added in Q4 2016. U.S. net additions slowed to 1.4 million from 1.9 million in the previous quarter. International net additions were down from 5.1 million in the previous quarter to 3.5 million. The platform aims to add 3.2 million subs in Q2 2017—600,000 in the U.S. and the rest internationally. Netflix will spend more than $1 billion in marketing this year to drive customer acquisitions.
In Q1, the company reported U.S. streaming revenues of $1.5 billion and $1.05 billion coming from the international market. Consolidated revenues rose to $2.6 billion, delivering a net profit of $178 million.
“We have high satisfaction and are rapidly growing in Latin America, Europe and North America,” the company said in its letter to shareholders. “We are making good strides in improving our content offering to match local tastes in Asia, Middle East and Africa, but have much progress to make, like in Latin America a few years ago.”
On its feature film initiative, the company said it is open to making titles available to large theater chains simultaneous to the streaming release. “Let consumers choose,” the letter stated.
Responding to the emergence of “virtual MVPDs” like Sling, YouTube TV and Hulu’s upcoming OTT service, the shareholder letter noted: “We believe VMVPDs will likely be more directly competitive to existing MVPD services since they offer a subset of the same channels at $30 to $60 per month, and may appeal to a segment of the population that doesn’t subscribe to a pay-TV bundle. But we don’t think it will have much of an impact on us as Netflix is largely complementary to pay-TV packages. Our focus also is on on-demand, commercial-free viewing rather than live, ad-supported programming.”
On the issue of live sports, following Amazon’s NFL deal, Netflix commented: “That is not a strategy that we think is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows.”