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‘It’s becoming an Internet TV world’, says Netflix amid record subscription growth

NetflixStreaming giant Netflix has reported its largest ever quarter of membership growth with more than seven million people signing up for the service in the final three months of 2016.

The firm had forecast growth of 5.2m but pulled in 7.05m, a healthy improvement on the 5.59m who joined in the fourth quarter of 2015.

Netflix said the increase was driven by “strong acquisition trends in both our US and International segments” although it acknowledged some of the growth may have been pulled forward from the current first quarter of 2017.

Netflix heralded the growth as further proof the entertainment industry was “becoming an Internet TV world”.

“That presents both challenges and opportunities for Netflix as we strive to earn screen time,” the company said.

Netflix, along with piracy and general millennial viewing habits were listed as the key threats facing the linear TV market at the recent Asia TV Forum and Market.

Domestically, the firm added 1.93m members in the quarter, exceeding forecasts of 1.45m, with international membership growth of 5.12m, against forecasts of 3.75m.

More than 47% of subscribers are now outside the US.

Netflix did not provide a breakdown of regional international growth but said it was “very broad based geographically”.

“Our original content continues to be well-received all over the world,” the Internet streaming firm said.

Nevertheless, Netflix admitted that while its international roll out – excluding China – has made good progress “there remains a lot to learn to make Netflix as popular abroad as it is in the US”.

One of the challenges for Netflix is likely to be in Asia Pacific where a study last August found 45% of people in the region were unaware of its local launch.

It also faces several competitors in the form of Iflix, Hooq, Viu and most recently Amazon Prime which launched shortly before Christmas.

Meanwhile, Netflix forecast membership growth of 5.2m in the first three months of 2017, 1.5m in the US and 3.7m internationally.

“Our anticipation for a year-over-year decline in domestic net adds reflects a difficult comparison in the year ago quarter where we exceeded our net adds forecast by 27%,” the statement said.

“Similarly, in our international segment, we will lap our Rest of World launch in January of last year. We also expect a greater membership impact from our content slate in the second half of 2017.

“On a sequential basis, we believe our strong Q4 results likely pulled forward some net adds from Q1’17 to Q4’16.”

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