David Farnor | On 22, Jul 2014

Netflix now has over 50 million members around the world in over 40 countries, the company has announced.

Revealing the company’s latest growth figures in its Q2 2014 report, the Internet TV giant has confirmed that within 15 years of launching its subscription service, it now has over 50 million subscribers across the globe.
That growth has been driven in no small part by Orange Is the New Black. The launch of Season 2 was “every bit the global media event we had hoped for”, says CEO Reed Hastings. Indeed, Orange is now the most watched series in every Netflix territory.

European expansion

Outside the US, membership has soared 78 per cent in the last 12 months, taking its total international member base to 13.8 million. That “continued growth in all of our markets” is just the first step in Netflix’s ambitious expansion plans.

“Our broad success from Argentina to Finland has convinced us to further invest aggressively in global expansion,” say Hastings.

Indeed, in September, the country will launch in Germany, France, Australia, Switzerland, Belgium and Luxembourgh, with over 60 million broadband households up for grabs.

The challenge for Netflix has been to offset the cost of expansion; increasing its subscribers is the only way to generate income, but the infrastructure and marketing costs involved has previously seen the company operate at a loss. That has not dampened its appetite: Orange Season 2 saw the company’s largest content marketing push to date.

“As explained in our Long Term Letter, our plan remains to run at about global break-even to fund investment in global expansion,” says Hastings.

Price hike has “minimal impact” on growth

In May, therefore, Netflix took the logical step of raising its price from £5.99 a month to £6.99 a month – and introduced a cheaper £5.99 plan, which offers viewers one screen at a time streaming in standard definition online. The standard two-screen HD plan is the most popular plan choice for new members, with the raised price having “minimal impact on membership growth”.

With 50 million members on board now paying a higher fee, Netflix’s future looks increasingly bright – and, indeed, Orange.

Jenji Kohan’s series is front and centre once again when it comes to critical acclaim: the show received 12 Emmy nominations this year, more than any other comedy series, while nominations for House of Cards grew from 9 last year to 13 this year. Notably, these two shows were nominated for Outstanding Comedy Series and Outstanding Drama Series while The Square, which received 4 nominations, is up for Outstanding Documentary. It is quite rare for a single network to receive nominations in all three of these categories as well as Outstanding Lead Actor and Outstanding Lead Actress for both drama (Kevin Spacey and Robin Wright for House of Cards) and comedy (Ricky Gervais for Derek and Taylor Schilling for Orange).

A bright, Orange future

Orange’s diversity has been one of its key strengths – a lesson that Netflix is quick to appreciate. Reflecting the increasingly global nature of the Netflix service, the company’s other original content is spreading around the world, from Marco Polo, shooting in Kazakhstan and Malaysia, to Daredevil in New York, House of Cards in Baltimore, a “dark family thriller” led by Kyle Chandler in the Florida Keys and, of course, Sense8, a mind-bending series from the Wachowskis, which is filming all over the place.

The company is pushing forward technical innovation as well as new content. A partnership with Virgin Media’s set-top boxes in the UK is a “compelling streaming experience that delivers above-median viewing and satisfaction”, although it is “not transformative”, says Netflix. Set-top box integration in the US has happened too with several regional MVPDs including Suddenlink, RCN, Grande and Atlantic Broadband.

“MVPDs would rather their customers’ use Netflix on their set-top and remote than use Netflix on Internet set-tops such as Apple TV, partially because that drives the pay-per-view consumption for the respective set-top owner,” notes Netflix.

It has also made a big fuss over its development of 4K video too, with flagship shows House of Cards and Breaking Bad both streamng in Ultra HD – a format that Netflix expects to be Internet-centric as linear TV will be late to switch their networks to UHD 4K.

In the physical world, meanwhile, Netflix will start to introduce gift cards in select stores in the US, Canada, Mexico and Germany later this year, a move that puts the company at the iTunes level of ubiquity.

Global domination, you sense, may not be that far out of reach after all.

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