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The International expansion of movie and TV streaming Company Netflix is back on and Australia is on the radar according to Company officials.

At CES earlier this month senior Netflix executives told SmartHouse that Australia was one of the Countries that Netflix was “back interested in” after the Company put all International expansion on hold following a move into the UK market and emerging problems in their domestic US market.

Overnight shares in Netflix soared 33% after the Company reported fourth-quarter profit that topped analysts’ estimates, improving margins in its streaming business and better results than expected from their UK expansion.

Among the Companies that are looking to partner with Netflix is Telstra who recently met with the US Company according to Netflix sources.

The change in attitude towards the launch of a Netflix service in Australia came after the Company recorded better than expected growth from their UK International launch.

International users will range from 2.5 million to 3.1 million, up from 1.86 million at year-end, the company said.

Netflix’s launch in the UK has been “very successful” to date the Company said overnight. The chief executive, Reed Hastings, said Netflix UK, which launched on 9 January, has exceeded expectations with faster subscriber growth than the company saw when launching into the broadly comparable Canadian market.

Hastings said in a letter to investors that the major rival in the UK was not LoveFilm, the online streaming service owned by Amazon, but BSkyB’s Sky Go service, which offers subscribers on-demand access via mobile devices to the satellite broadcaster’s film, sport and TV entertainment content.

Netflix executives admit that one of the issues when considering a launch in Australia is the size of the market “22 million is a very small number” they said.

Analysts that ChannelNews has spoken with, claim that a Telstra deal would involve Foxtel with Netflix movies being offered via both Foxtel and Bigpond Movie services.

Netflix would also be available in Australia for partners such as Sony and Microsoft with their gaming consoles as well as via several PC vendors.

It’s believed that Telstra has offered to develop an expanded Netflix application for the Australian market.

Hastings said of the UK market “In the long-term competition will likely be Sky Go offering Sky Movies and Sky Atlantic on demand,” he said. “Over the coming years, we hope to be able to grow large enough to outbid Sky for one or more major studio output deals, as we did this year for MGM.”

 

Hastings said the combined investment in launching in the UK and Ireland and growing its business in Latin America will result in a loss in the company’s international operations of between $108m and $118m in the first quarter of 2012. Overall Netflix expects to make a global loss of between $9m and $27m in the first quarter.

Nevertheless investors were buoyed by Netflix’s performance in the fourth quarter when it added 610,000 net US subscribers – the company had stunned the market shedding 800,000 in the three months to the end of September after a huge price hike – and outperformed financial expectations.

Netflix had 24.4 million US subscribers and 1.9 million international customers, as of 31 December.

The company reported total revenue of $875m in the three months to 31 December, a 47% year-on-year increase.

 “We’re really excited and pleased in our recovery,” Hastings, 51, said in an interview. “We’ve got a long way to go and a huge opportunity ahead.”


Netflix, whose shares slumped 61 percent in 2011, is the best performer on the Standard & Poor’s 500 Index today and for the year so far.

U.S. online subscribers increased to 21.7 million, while mail-order DVD customers shrank to 11.2 million. The figures for each include people who get both services.

Two Billion Hours

Netflix said on Jan. 4 that users of its online streaming service spent more than 2 billion hours watching films and TV shows in the final three months of 2011.

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