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Netflix has 26 million streaming customers worldwide, is prepared to do battle with HBO

Netflix has 26 million streaming customers worldwide, is prepared to do battle with HBO


Netflix announced its fiscal Q1 earnings, revealing 26 million global subscribers and a successful trial of its first original content "Lilyhammer." The company expects to continue down this path as it returns to global profitability next quarter, opening a new international market in Q4.

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Calling itself the "world's leading Internet TV network," Netflix has announced $870 million in revenue for its fiscal Q1 2012. The company also added almost 3 million subscribers to its streaming service — 1.74 million domestic and 1.21 million for international -— bringing it up to a total of 26 million users streaming worldwide. The DVD business took another decline, down 1.08 million customers to 10.09 million total — about 7 million of which also subscribe to streaming. Netflix expects the physical media side to continue its decline, albeit at a slower pace than past quarters.

As far as original programming is concerned, Netflix is now calling it "strategic expansion" benefiting its overall brand. "We are now treating it as a capability we should build, like international, to achieve our long-term ambitions. What is still uncertain is when or whether we will take it beyond five percent of our large content spend." Netflix says Lilyhammer, so far the only original show on the service, has performed on par with similar premium exclusive content, in terms of cost per viewing hour ("which is how we evaluate content efficiency"). The press release also cites the upcoming Arrested Development season the still-to-be-seen House of Cards, and and Hemlock Grove, a 13-episode series from Eli Roth premiering in 2013.

Netflix also seems confident that it won't be losing streaming licenses anytime soon, going so far as to suggest an "FX Go" with exclusive Sons of Anarchy streaming is unlikely. In case you didn't get the not-so-subtle reference to HBO, the press release specifically calls out the premium channel "that is strategically motivated to impede our growth." In other words, the content arms race continues unabated.

Netflix says it plans to "return go global profitability" in the next quarter and will "open an additional attractive European market" in Q4, although it doesn't specify beyond that.