Netflix now has more than 50 million subscribers worldwide according to the company’s quarterly earnings report released today.
The content streaming website added 1.69 million users during the second quarter ending June 30, with 1.12 million new international subscribers and 570,000 additional U.S. members bringing the company’s total users to 50.05 million. Netflix beat its own forecast of 1.46 million new subscribers over the three month period.
The Los Gatos, California-based firm posted revenue of $1.34 billion and earnings per share of $1.15, meeting analysts’ estimates on the former but not the latter. Analysts polled by Thomson Reuters predicted per share profit of $1.16 and $1.34 billion in revenue. Netflix also reported net income of $71 million, more than double that of the same period last year. Shares in Netflix rose by 1% in after hours trading following the release of the numbers.
The second quarter of the year has traditionally been a slow one for Netflix’s subscription numbers. The company added 4 million new subscribers in the first quarter of 2014 and analysts predicted a more conservative figure for Q2. But the number of new users beat expectations despite the challenges of increased competition from the likes of Amazon, the popularity of the FIFA World Cup and a price increase of $1 extra per month for new users.
“I think we’ve seen the impact of the price change go through already,” Netflix CEO Reed Hastings said in a conference call. “[The effects are] pretty nominal, both in terms of acquisition and retention. We’re thrilled with that outcome.”
Hastings also revealed that the company was worried about the effects on viewing numbers around the world caused by the FIFA World Cup in Brazil. However, there was no drop off in growth rates even in the South American country hosting the event, he said.
With 36.24 million users in the U.S., Netflix has become the largest standalone subscription programming service in the country. Yet this expansion has come at a cost as the company has fought with internet service providers over who should pay for the bandwidth all those users require.
Earlier this year, Netflix reached agreements with Comcast and Verizon to pay for faster and more reliable access to the cable companies’ subscribers. However, a very public battle is still underway with the latter, and the partnership has yet to be implemented. The debate concerns the wider issue of net neutrality, in which some argue that internet service providers should not be able to prioritize certain bandwidth usage at the expense of others.
As Netflix’s subscriber base increases, so too could the ferocity of its arguments with broadband providers. Hastings urged the Federal Communications Commission to use merger conditions to introduce net neutrality regulations, adding that he’d hate to see “ISPs brown out or black out certain internet sites while they extract payments.”
For the current quarter, Netflix has projected per-share earnings of 89 cents, and expects to add 3.69 million subscribers, 2.3 million of which to be added internationally. As of close of trading on Monday, Netflix stock had risen 71% over the past 12 months.