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TECHNOLOGY A23
On the March:
Netflix impresses investors with robust 4Q overseas growth
MICHAEL LIEDTKE
AP Technology Writer
SAN FRANCISCO (AP) — As
its U.S. subscriber growth
tapers off, Netflix’s Internet must find a suitable partner
video service is setting out
to conquer the rest of the
world in an audacious ex-
pansion likely to sway the
company’s stock and the
prices it pays for TV shows
and movies.
The stakes riding on Netflix’s to be facing more chal-
next act came into sharper
focus this week with the
release of the company’s
fourth-quarter report.
Netflix added 1.56 million
U.S. subscribers from Oc-
tober through December,
slightly below what man-
agement had predicted.
It marked the second-
straight quarter that Netf-
lix’s subscriber gains in the
U.S. have disappointed.
But international growth
topped the company’s
projections to give Netflix
nearly 75 million worldwide
subscribers through De-
cember.
Netflix Inc.’s fourth-quarter
earnings also exceeded
analyst forecasts, helping
to lift the company’s stock
by more than 6 percent in
extended trading.
Although most of Netflix’s
subscribers are in the U.S.,
the overseas markets are
now the company’s mar-
quee attraction. The com-
pany picked up another
4 million international sub-
scribers in the fourth quar-
ter to give Netflix 30 million ming from TV networks
customers outside the U.S.
The Los Gatos, California,
company expects to add
another 4.4 million inter-
national subscribers during
the opening three months
of this year compared with
a projected gain of 1.75
million in the U.S.
“Our high penetration in
the U.S. seems to be mak-
ing net additions harder
than in the past,” Netflix
CEO Reed Hastings con-
ceded in a letter accom-
panying the fourth-quarter
report.
Netflix’s international ambi-
tions took a quantum leap
earlier this month when its
service simultaneously de-
buted in 130 more coun-
tries. The service is now in
Thursday 21 January 2016
every major market on its Nickelodeon, Starz and year. That’s on top of the month for its standard plan
international agenda with Epix. Wedbush Securities more than $9 billion that during the past two years.
the notable exception of analyst Michael Pachter the company has already A price freeze that kept
China, where Netflix still predicts that trend will con- committed to pay to stu- rates at $8 per month for
tinue as other TV networks dios by September 2018. an estimated 22 million U.S.
and satisfy the concerns demand money that Netflix The company currently subscribers expires in May,
of government regulators might not be willing to pay, generates annual revenue threatening to trigger a
who block the country’s but Amazon probably will. of about $7 billion and end- wave of cancellations dur-
population from watching
some content. A person displays Netflix on a tablet in North Andover, Mass. Netflix reported impressive
Despite its early inroads quarterly financial results this week, anchored by overseas growth.
overseas, Netflix appears
(AP Photo/Elise Amendola)
lenges internationally than
it did nine years ago when “Take a cue from the deals ed December with $2.3 bil- ing the spring and summer.
it moved beyond its DVD- that aren’t being done lion in cash. Netflix’s rising costs for vid-
by-mail service and began with Netflix,” Pachter said. Some analysts believe Net- eo and expanding into
streaming video to Inter- “It is a sign that the content flix won’t be able to pay other countries already has
net-connected devices in providers are willing to walk much more for program- pinched its profit margins.
the U.S. Netflix now must away and go elsewhere.” ming without further raising Netflix earned $43 million,
secure enough program- As it is, Netflix already U.S. subscription prices that or 10 cents per share, in its
ming to cater to the dispa- plans to spend about $5 have already climbed from latest quarter, a 48 percent
rate tastes and languages billion licensing video this $8 per month to $10 per drop from the prior year.q
of people scattered across
190 countries while bidding
against richer rivals Ama-
zon.com and Alphabet
Inc.’s YouTube that also
are trying to reel in more
overseas viewers to their
own video services.
In an effort to gain an
edge, Netflix has been in-
vesting more heavily in
shows such as the award-
winning “House of Cards”
and “Orange Is The New
Black” that can only be
watched on its service.
Netflix will feature 600 hours
of original programming
this year, up from 450 hours
last year.
But Netflix has been losing
the rights in recent years
to other popular program-
Twitter disruption silences swaths of US, EU for hours
YOUKYUNG LEE Twitter Inc., which has 320 ror” just before 8 a.m. East- far this year. On Monday,
BREE FOWLER million active users, said on ern. some users could not ac-
AP Technology Writers its website that the six-hour- Twitter’s mobile app was cess Twitter on mobile and
Some Twitter users had to long disruption was related partially functioning for web for about 10 minutes.
do without earlier this week to a change in an internal some users but its timeline The service was disrupted
after sporadic outages code, which the company updated new tweets spo- on Friday for about 20 min-
knocked the social media subsequently reversed, fix- radically. Its search func- utes.
site offline in the U.S. and ing the issue. tion appeared disabled as The outages come at a
Europe on Tuesday. Earlier in the day, users said some hashtags or keyword time when San Francisco-
It was unclear how wide- the service was not acces- searches returned no re- based Twitter and its ex-
spread the outages were, sible on desktop comput- sults. ecutives are trying to con-
but by mid-morning on the ers. Twitter’s blog posts, cor- Users’ profile pages ap- vince Wall Street that they
East Coast, desktop and porate info and most other peared to be accessible can deliver bigger revenue
mobile versions of Twitter pages on the Twitter.com from the mobile app. and profits. Meanwhile, the
appeared to be working. website were also inacces- Third party services, such company’s stock languish-
And the company tweet- sible, displaying the blue er- as the TweetDeck service, es at all-time lows. Twitter
ed early in the afternoon ror screen. also returned a blank page. shares have lost 68 percent
that the issue had been re- There were complaints of Twitter has suffered sev- of their value since peaking
solved. users receiving a “server er- eral service disruptions so at $52.87 in April.q