Netflix: We'll Do a Couple More "House Of Cards"-Style Originals

Published on April 25, 2011
by Peter Kafka

Netflix says the high-profile move it made into original programming this year won’t be its last.

The video rental service, which made a splash when it bought the first-run rights to “House of Cards,” an HBO-style series that will run next year, says it wants to do more.

“Ideally, we’ll license two or three similar, but smaller, deals so we can gain confidence that whatever results we achieve are repeatable,” CEO Reed Hastings writes in his quarterly shareholders‘ letter today.

Hastings’ letters are pretty entertaining reads, especially by the standards of most quarterly earnings reports. So read it for yourself if you have time. If you don’t, some other highlights:

  • International: Hastings says Netflix “slightly over-forecast” growth in Canada, its first expansion market, but says they’re still planning on expanding into another market this year. The company has increased the operating losses it expects the move to generate, though–it now says it will lose up to $75 million in the second half of the year, up from a previous estimate of $50 million.
  • Bandwidth and the cable guys: Last quarter, Netflix complained loudly about the way some bandwidth providers charge the company; this time around it is much quieter. With the exception of Rogers in Canada: Netflix says its bandwidth caps and penalties are “outrageous.”
  • Earnings:  Revenue of $719 million and earnings of $1.11 per share, vs. Wall Street’s targets of $704 million and $1.06.
  • Subscribers: 23.6 million globally, which is about what Wall Street was looking for.
  • Guidance: The company’s Q2 revenue is in line with Wall Street’s expectations, but subscriber and earnings numbers were a little lower. The stock is down 5 percent in after-market trading.

Here’s a cheat sheet from Citigroup’s Mark Mahaney:

Netflix hosts its conference call at 6 ET; I’ll circle back then.

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