Netflix heading for 17 million international subscribers

Netflix is expected to achieve 17 million paying subscribers to its international operations by the end of 2014, following its announcement of 14.4 million international subs in September. Launches in six European countries during September will help to boost the total.

Simon Murray, Principal Analyst at Digital TV Research, said: “We have made several adjustments to our previous estimates [based on the June results]: subscriber numbers are now a lot higher in Latin America (and a little higher in Canada). Subscriber numbers are now a lot lower in the UK (and a little lower in the Nordic countries).”

Netflix paying streaming subscribers by country (000)

                  Start
                   date  Dec-11  Dec-12  Dec-13  Sep-14
                 ------  ------  ------  ------  ------
USA                      20,153  25,471  31,712  36,265
            
International             1,447   4,892   9,722  14,389
             
Canada           Sep-10   1,138   2,050   3,180   3,475
                
Latin America    Oct-11     309     857   2,942   4,854                    
 Argentina                   57     130     295     480
 Brazil                      85     275   1,285   2,174
 Chile                       27      65     150     230
 Colombia                    45     110     307     535
 Mexico                      65     227     765   1,200
 Other                       30      50     140     235

UK & Ireland     Jan-12       0   1,480   2,400   3,040
 Ireland                      0      80     150     190
 UK                           0   1,400   2,250   2,850

Nordics          Oct-12       0     505   1,100   2,000
 Denmark                      0     120     245     420
 Finland                      0      85     205     400
 Norway                       0      95     210     380
 Sweden                       0     205     440     800
                     
Netherlands      Sep-13       0       0     100     700
Belgium          Sep-14       0       0       0      30
Luxembourg       Sep-14       0       0       0      10
France           Sep-14       0       0       0     100
Germany          Sep-14       0       0       0     125
Austria          Sep-14       0       0       0      30
Switzerland      Sep-14       0       0       0      25

Source: Digital TV Research estimates from Netflix totals

He continued: “We underestimated Latin America last time due to the historic payment problems that Netflix encountered (low credit card ownership; little electronic banking; low broadband penetration etc). Netflix has introduced simpler payment methods (such as prepaid cards) which has boosted take up. However, economic slowdown is expected in the region, especially in Argentina and Venezuela, which could hit Netflix take-up.”

These international figures do not include subscribers to the US service who are based abroad (these homes are included in the US figures). It is relatively easy to do this by using unblocker software, VPNs and DNS proxies. This is more common in Latin America and Canada than in Europe. The US service provides more titles and more recent titles.

Netflix has announced plans to launch in Australia and New Zealand next March. However, more than 200,000 Australian homes already subscribe to the US service.

Netflix international subscribers (000)

            Dec-11  Dec-12  Dec-13  Sep-14
            ------  ------  ------  ------
Total        1,858   6,121  10,930  15,843
Paying       1,447   4,892   9,722  14,389
Non-paying     411   1,229   1,208   1,454

Source: Netflix

How many homes are receiving Netflix for free (usually as part of a trial)? The table above shows the number of non-paying members is as high as it has ever been, but it is not as high as some suggest. We believe that much of the increase in the quarter to September was down to the expansion in six new European markets.