Netflix Getting 'The Interview' Jan. 24; Adds 4.3 Million Subs Worldwide20 Jan, 2015 By: Erik Gruenwedel
Nearly 50% of service’s operating profit comes from disc rental
Netflix reported a fourth-quarter (ended Dec. 31) global gain of 4.3 million subscribers, including 1.9 million in the United States. The subscription streaming pioneer ended the period with more than 57 million subs (54.4 million paid), including 18 million (16.8 million) internationally.
Netflix added a record 13 million subscribers in 2014, underscoring SVOD’s ongoing impact on home entertainment.
Notably, Netflix said it would begin streaming Sony Pictures controversial comedy The Interview, from Seth Rogen and co-starring James Franco, beginning Jan. 24, about three weeks before the film's Feb. 17 arrival on Blu-ray and DVD. The film, which was at the center of a North Korean cyber attack on Sony last November, has generated more than $40 million in digital revenue since its Christmas Eve debut.
“It is increasingly clear that virtually all entertainment video will be Internet video in the future. We’ll continue to improve our content, our marketing and our service to eventually achieve ‘must have’ status in most households,” CEO Reed Hastings and CFO David Wells wrote in the investor letter.
The Los Gatos, Calif.-based company generated net income of $83 million (up 73% from $48 million year-over-year) on revenue of $1.3 billion — the latter up 36% from $962 million a year ago.
Notably, more than 49% of Netflix’s operating income ($89.3 million) came from disc rental. It ended the period with more than 5.9 million members — down 1 million subs from last year.
The international segment reported an operating loss of $79 million, reflecting Netflix’s ongoing investments in global operations. The company ended the period with $9.5 billion in content license obligations, up $2.3 billion from a year ago.