Netflix has released its fourth-quarter 2014 financial results along with a letter to shareholders, posting both to its website. These documents show plans to increase its amount of original content, rapidly expand internationally, continue its DVD-by-mail service, and more.
First, some numbers. Netflix picked up 13 million new members in 2014, an increase from 11 million the year before. The video on demand provider now boasts 57.4 million subscribers, and it expects to end the first quarter of the new year with 61.4 million.
Earlier this year, Netflix raised its price from $7.99 to $8.99, a move it believed cost it subscribers throughout the months that followed. The company is now changing its tune, finding that while US growth slowed in 2014, it was still highest among lower-income Americans, folks who reasonably would be most sensitive to price hikes. Netflix will obviously continue to study the US market, as it believes virtually all entertainment video will be streamed over the Internet in the future, and it sees itself continuing to lead the charge domestically and around the world.
Speaking of which, Netflix saw steady growth internationally, including in Austria, Belgium, France, Germany, Luxembourg, and Switzerland; all expansions that arrived in the third quarter of last year. The service is available in 50 countries, and it sees its reach growing to 200 over the next two years thanks to the rapid proliferation of smartphones, tablets, and smart TVs.
Netflix says increasing its size is good for everyone, because the increased revenue gives in more money to create and license content for its viewers. Yet surprisingly, the company found that its original productions were more cost-effective than licensed shows. To clarify, it cost Netflix less money per view to produce its own content than to buy the rights to stream well-known shows and movies from big studios. As a result, the company intends to produce more of its own creations in the years ahead.
In the immediate future, season Three of House of Cards will premiere February 27th, joined by The Unbreakable Kimmy Schmidt (a comedy by Tina Fey and Robert Carlock starring Ellie Kemper due out March 6th) and Bloodline (due on March 20th from the creators of Damages). Crouching Tiger, Hidden Dragon II: The Green Destiny, the company's first original feature film, is due out on August 26th in all markets. Throughout the course of 2015, Netflix plans to release 320 hours of original series, films, documentaries, and stand-up comedy, three times the amount it produced last year.
And don't forget the DVD-by-mail service that made Netflix famous in the first place. 5.8 million members still take advantage of it, bringing the company $89 million in the fourth quarter. The company has big plans, and for now, mailing discs out to people remains a part of them.