Mark Mahaney, RBC
Question for Reed or David on the international sub numbers. They came in materially higher in the December quarter and you’re guiding from materially higher than expected numbers for the March quarter. Can you give us any color on which market, which countries did better than expected or is this just the case of the European launch being a little more delayed than expected and you’re seeing the full impact of that? Where was the upside from?
David Wells, CFO, Netflix, Inc. (NASDAQ:NFLX)
Mark, this is David. It’s across several markets and as you know, we don’t talk specifically about individual markets for competitive reasons. But I would say it wasn’t driven by any one individual market, it was driven by several markets. So we are really pleased with the growth that we saw in the fourth quarter and carrying into the first quarter.
Richard Greenfield, BTIG
If I can just follow-up David on that question on Latin America though. You did give out a 5-million subscriber — that you would reach to 5 million subscribers — during the quarter in Latin America. Could you give us any other feel — are there any other milestones to think about as you think about other markets that you’ve already launched that we should be thinking about? And why are you disclosing something like 5 million in Latin America without more detail overseas?
David Wells, CFO, Netflix, Inc.
Well, it’s a nice round number and we’ll be giving out milestones as we hit them, I think, in other markets. But it is incrementally better for us to talk about that with consumers in Latin America because it validates the quality, the breadth, and the size of the service so it’s helpful from a consumer standpoint in the markets. So we weigh, between the investment community and the consumer community, what’s helpful in terms of internal information.
Richard Greenfield, BTIG
What changed that actually accelerated it? Because there was an area that you talked about as a problem historically on these calls. Why is Latin America now accelerating to the point where you are now really getting excited about the growth potential?
David Wells, CFO, Netflix, Inc. (NASDAQ:NFLX)
Well, nothing changed. We knew we would hit 5 million in the quarter and we did. What changed maybe that we gave you incremental information. I think what we’ve said all along in terms of Latin America — it was a challenging market. We’ve had payments issues and e-commerce trust issues that we’d wrestled with and improved over the last three-and-a-half years, but it’s been growing all along.
I think folks may not have taken our word for that but we are very pleased with it. It’s been steady growth, we continue to see great growth and great potential in the market. It’s a market with about 65 million broadband households so if you take than 5 million number that we talked about, and 65 million in terms of addressable. we I think we’ve got a lot of room for growth in the market.
Mark Mahaney, RBC Analyst
David, I want to follow-up on the global expansion move. Two things: you bolded in this press release was this line about “completing global expansion over the next two years.” I noticed the bolded stuff. So I guess the question is, I know you talked about this a little bit before, it sounds like you may be buying international content or getting content for international markets more efficiently by the learnings from some of the international markets, the launches that you’ve had to date, that have allowed you to be more efficient in rolling-out new markets going forward, so it’s a pretty big statement to make and pretty big change just over the last 90 days.
