Netflix to up expansion efforts in 2015

David Wells

Netflix is gearing up to make a “sizeable expansion” next year, that could surpass the number of rollouts it has made this year, according to chief financial officer David Wells.

Speaking at RBC Capital Markets’ 2014 Technology, Internet, Media and Telecommunications Conference in New York, Wells that though Netflix was still “teasing through its plans” it intends to expand further globally in 2015 and also appreciates the opportunity that lies in Asia.

“We think that you should expect that the next year markets are a sizeable expansion. So something in the order of this year or even potentially a little bit more,” said Wells.

Asked specifically about Asia, Wells said: “We have the appropriate appreciation for both the opportunity and the challenges in those markets.

“A lot of those markets have the potential to have much more local content focus in terms of programming, but that’s to be seen. There’s still plenty of demand if you look at what folks are watching in Asia – it’s still House of Cards, it’s still a lot of western content.”

In September, Netflix launched in six countries in Europe – France, Germany, Austria, Switzerland, Belgium and Luxembourg. Wells commented that in these markets, viewer engagement, in terms of hours viewed is “as strong or stronger than in any other country we’ve launched.”

The comments come a month after Netflix added fewer new customers than it had previously predicted in its third quarter.

Netflix said that domestically it added 0.98 million streaming customers in the quarter, and 2.04 million streaming customers. In its last earnings announcement it had anticipated net additions in these markets of 1.33 million and 2.36 million respectively.

Separately, year-on-year customer additions were also down from 1.3 million in Q3 2013 to 1 million in Q4 2014.

“As best we can tell, the primary cause is the slightly higher prices we now have compared to a year ago. Slightly higher prices result in slightly less growth, other things being equal, and this is manifested more clearly in higher adoption markets such as the US,” said Netflix in a letter to its shareholders at the time.

Netflix yesterday announced that it has updated its Apple mobile app, bringing optimised experience for new models of iPhones including 1080p resolution on the iPhone 6 Plus.

“When Apple announced the iPhone 6 and iPhone 6 Plus in September, we were excited about the opportunity to extend the Netflix application to different screen sizes. We immediately began work on optimizing our user interface for the larger and higher resolution screens, and we’re happy to announce these changes are included in today’s update to our app,” said Netflix.