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Netflix Inches Toward 80 Million Subscribers, Thanks To Aggressive Global Expansion

Netflix added 17 million subscribers last quarter. Most of those were outside the U.S.

Krysten Ritter, Eka Darville, Colby Minifie in the Netflix original series “Marvel’s Jessica Jones”.

[Photo: Myles Aronowitz/Netflix]

Video streaming service Netflix added 17 million subscribers last year, according to earnings numbers released by the company on Tuesday. By the beginning of January 2016, Netflix had surpassed 75 million users. The company said it expects to add 6 million more in the first quarter of this year.

So where is all this growth coming from? Overseas, primarily. Of the 5.9 million subscribers added in the fourth quarter of 2015, more than 4 million of them came from outside the United States. This has been the trend over the last several quarters, as Netflix has focused on international expansion.

These numbers can only be expected to grow in 2016. At the Consumer Electronics Show in Las Vegas earlier this month, CEO Reed Hastings announced that Netflix was expanding to an additional 130 countries, including Russia and India.

Of course, Netflix wouldn't be able to draw in all these new users without its addictive shows and movies. For the last few years, the company has focused increasing resources on original programming like Orange Is the New Black and House of Cards, the latter of which famously swept the Emmy awards in 2013. In 2015, Netflix kept its original programming train chugging along with huge hits like Jessica Jones and Narcos.

As cable networks and traditional content providers grow nervous about the growing threat posed by Netflix and its on-demand model, the need for the company to ramp up its original programming has only intensified. Next month, Netflix will release Fuller House, the widely anticipated sequel to the beloved 1980s sitcom Full House. And that's just the beginning.

"In a single quarter, we're releasing more programming than most networks do in a whole year," said Netflix content chief Ted Sarandos in today's earnings call. All told, the company plans to add 31 new shows in 2016. It all adds up, Sarandos says, to 600 hours of new original programming.

It remains difficult to gauge the success of Netflix's shows with any precision, since the company doesn't share viewership numbers on its programming.

This rapid expansion in both global reach and original programming doesn't come without its costs. Both initiatives are expensive, which has result in a slowing of profits for the company.

While the company's user growth is expected to continue into 2016, it may not be without hiccups: The company reminded users that its rates will increase for some members in a few months. People who are grandfathered into the old rate of $8 per month for HD streaming will have to pay $10 per month, or switch to standard definition to keep the old price.

Netflix brought in $1.83 billion in revenue last quarter, a 23% increase over the same quarter last year. After expenses, its net income was $43 million.


Related: What Netflix's Amazing New Unlimited Parental Leave Policy Really Means