Netflix’s relationship with Virgin has been a “nice positive”, though “not transformative”, to its overall performance in the UK to date, according to co-founder and CEO Reed Hastings.
Speaking in an earnings interview accompanying the company’s latest set of results, he added that Netflix had only been live on Virgin for six months but that it was great for consumers.
Hastings also played down the specific conditions regarding local content that exist in France, one of the next European markets Netflix will launch in this autumn.
Indeed, the company encounters unique conditions in every market and is both looking to undertake some production in the country and make French productions more accessible around the world.
Speaking in the same interview, Ted Sarandos, Netflix CCO, said local content now accounts for 10-20% of the company’s output but may increase in some markets in the future.
Hastings said that there is tremendous adoption of on demand in markets such as Argentina, Brazil, Finland and the UK.
Although Netflix was worried by the impact during the recent World Cup, net additions were strong in Argentina.
Interestingly, Netflix also points out that post World Cup, the number of smart TVs used for Netflix viewing in Latin America is at a new high – and higher than in any other region the company serves.
Netflix’s latest set of results show the company ended the second quarter with 50.05 million members in 40 countries, or 1.69 million more than three months earlier, with the total projected to grow to 53.74 million in Q3. Its total revenues in the second quarter amounted to $1,146 million (Q3: $1,224 million), while the contribution profit was $227 million.
Internationally, it had 13.80 million members in Q2, up from 12.68 million three months earlier, with the total projected to rise to 16.16 million in Q3. It had a contribution loss of $15 million, which though an improvement on the $35 million loss in Q1 is expected to grow to a loss of $42 million in Q3.
Netflix’s total operating income, including DVD, in Q2 was $130 million ($98 million in Q2) and net income $71 million ($53 million).
Although Netflix will launch in Germany, France, Austria, Switzerland, Belgium and Luxembourg – markets with a combined total of 60 million broadband households – in September, it will still only be addressing around a third (271 million of 728 million) of current global households.
In the interview, the company gave no indication as to where it will next launch after this autumn.
When asked about the possibility of a Fox/Time Warner deal and how it could impact on Netflix, Hastings said that it would take things as they come and that the more it works directly with producers the less vulnerable it will become.