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Netflix's international subscriber gains indicate a culture update (NFLX)

Netflix added 5.2 million subscribers globally during Q2, soaring past expectations and nearly doubling its internal forecast of 3.2 million new subscribers

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Netflix added 5.2 million subscribers globally during Q2 2017, soaring past expectations and nearly doubling its internal forecast of 3.2 million subscriber additions.

The strong growth allowed the company to finally pass the coveted 100 million subscriber mark to reach 104 million subscribers. Netflix credits its strong growth to its popular content offering.

Netflix's subscriber growth positions it well against other streaming competitors. Netflix’s 104 million global subscribers overshadows YouTube Red’s roughly 1.5 million paying subscribers and Amazon Prime’s roughly 80 million members. Moreover, Netflix’s $6 billion original content budget sits at the top of the pack. Amazon stated it was likely to triple its spend on originals in 2017, which JP Morgan analysts interpret to mean its budget will rise to roughly $4.5 billion. YouTube plans to spend hundreds of millions of dollars in the next year on original shows and movies.

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The majority of Netflix’s subscribers are now outside of the US. Of the subscriber additions, 1.1 million were from the US, while 4.1 million were from international markets. International segment now accounts for slightly over 50% of Netflix’s total membership base. The company’s subscriber breakdown is not surprising given its concerted efforts to expand globally. It first expanded overseas in 2010, and has more recently partnered with cellphone and cable operators worldwide, giving it reach in international markets. Going forward, Netflix’s international strategy will likely remain a priority as its US presence continues to mature.

The company recently updated their culture policy to reflect global ambitions. The new description, which hundreds of employees globally contributed to, lists “inclusion” as a company value. The value touches on embracing different perspectives and collaborating with those of diverse backgrounds. As the company continues to grow globally, it will likely grow its number of international employees, which may cause offices to become more diverse. This makes Netflix’s update on culture more reflective of its global strategy, and could help retain and attract top talent in key markets.

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