Hastings
Netflix claims it is ahead of rival Lovefilm following its launch in the UK & Ireland six months ago.
“We believe we have pulled ahead of Lovefilm in every important streaming-related metric. Going forward, competing effectively with Sky is our core and substantial challenge,” CEO Reed Hastings and CFO David Wells said in a letter to shareholders.
Netflix returned to profitability in Q2, but admitted it is facing a challenge to meet its US domestic subscriber targets amid competition from the Olympics.
“Our Q3 guidance is 1 million to 1.8 million domestic net adds. If we finish Q3 in the high end of that range, we would remain on track for 7 million domestic net additions for the year; otherwise it would be challenging to achieve that goal by year end.”
The company said that Q3 had begun strongly, but that its planned international launch in Q4 would push it back into the red.
It anticipates net adds to be about equal to 2010 in Q1 and Q3, lower in Q2, and higher in Q4. The latest quarter produced about 50% fewer domestic net adds than in Q2 2010. Total US subscriptions currently stand at 23.94 million.
Almost 600,000 international streaming members were added Q2, ending the quarter with 3.6 million international members. Compared to Q1, average paid subscribers increased 41% in the quarter.
International members came in slightly lower than anticipated due to issues with subscribers in Latin America.
