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Netflix hits 50 million subscribers worldwide

Netflix passes 50-million member mark
Netflix earnings are in line with analyst expectations

Netflix Inc. has hit the 50-million member milestone.

The Los Gatos, Calif., on-demand video company said Monday that 50.05 million people around the world now subscribe to its online service, after it added 1.69 million members in the quarter that ended June 30.

In the United States alone, the company's subscriber count has grown to 36 million thanks to original programming such as the women's prison drama "Orange Is the New Black," the second season of which became available for users in June. 

The company has drawn more subscribers by investing heavily in shows for its own service, including the political drama "House of Cards" starring Kevin Spacey and the Eli Roth-produced horror series "Hemlock Grove."

Most of those new subscribers came from outside the United States. About 1.12 million overseas customers signed up during the quarter, along with 570,000 in the U.S. 

"It's really this growing demand for control," said Netflix's chief executive, Reed Hastings, in an interview with analysts that was webcast on YouTube. "This is an enormous moment in history as on-demand services are coming to the fore around the world."

The growth comes even as Netflix began to increase its monthly subscription prices. The company in May raised prices for new customers in most of the countries where it's available, and the company said this change had "minimal impact" on subscriber growth.

Netflix's total revenue from streaming and its DVD-by-mail service hit $1.34 billion for the quarter, up about 25% from the same period a year earlier.

Profit surged. Netflix's net income more than doubled from a year earlier to $71 million, or $1.15 a share, essentially in line with analyst expectations. The average expected by analysts was $1.16 a share on revenue of $1.33 billion.

"There is nothing to hate about this report," Wedbush analyst Michael Pachter said in a note to clients. 

Netflix's stock price has increased more than 70% in the last year, closing Monday at $451.95 a share. The shares were little-changed in after-hours trading following the release of the earnings report.

Netflix, once known for its video-by-mail service, has been moving away from that offering in favor of online video. Streaming accounted for $1.146 billion in the most recent quarter, or about 85% of the total.

The company also projected earnings for the current quarter. Netflix said it expects to add 3.69 million subscribers and estimated earnings to come in at 89 cents a share.

Netflix's original-series slate continues to roll out. The company is releasing the fourth season of "The Killing" and the new adult animated series "BoJack Horseman" in August. The company also recently said it had nabbed comedian Chelsea Handler for a late night-style talk show, a move that made industry observers wonder what such a show would look like in the era of delayed viewing.

Netflix's chief content officer, Ted Sarandos, said that the company would help change the way people watch talk shows in a similar way that shows such as "House of Cards" changed how people watch scripted content.

People are not watching series the way they used to, he said. "They're also not watching these late night talk shows the way they used to."

Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder

Copyright © 2014, Los Angeles Times
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