Netflix, Inc. (NASDAQ:NFLX) second quarter earnings were in line with the company’s forecasts. They surpassed 50 million subscribers with approximately 37 million in the US and 13 million outside the US. They are considered to be matured in the US market by many analysts, but they are still evolving globally and with more expansion in other markets they could easily become the next big thing. CNBC’s Julia Boorstin reported on the international expansion plans of Netflix, Inc. (NASDAQ:NFLX).
Boorstin said that Netflix, Inc. (NASDAQ:NFLX)’s expansion into other countries, including France and Germany might happen in September. They had significant subscriber growth in the second quarter, which surpassed everyone’s expectations. To keep the momentum going, the company is planning its expansion in other markets, which is expected to drive the subscriber growth for third quarter.
She said that the Netflix, Inc. (NASDAQ:NFLX) stock is dropping due to investment in international expansion and content cost. In addition to this, third quarter earnings per share forecast also did not meet the forecast and dropped below the second quarter earnings. Although, Reed Hastings, Netflix CEO is not worried about this, as he feels that there is huge potential globally for their business.
“It’s really this growing demand for control and for the consumer to be able to click and watch what they want. So that’s why we are stepping up on the international expansion, because we really see that this is an enormous moment in history, as on-demand internet services are coming to the fore around the world,” Hastings said.
Boorstin mentioned that Netflix reiterated their stand on Federal Communications Commission’s Net Neutrality proposal and Comcast Corporation (NASDAQ:CMCSA) acquisition of Time Warner Inc. (NYSE:TWX). She said that Hastings hate the idea of internet providers blocking certain websites to extract payments.
She stated that in spite of Netflix, Inc. (NASDAQ:NFLX)’s subscription fee hike; there is no impact on company’s subscriber growth, which pleased many analysts.
There was fear among investors that the net ads might slow down during the FIFA World Cup, which did not happen. Boorstin feels that many people started buying smart TV’s ahead of the world cup which helped Netflix, Inc. (NASDAQ:NFLX)’s business in the last quarter and took the company safely through the world cup.