We review products independently, but we may earn affiliate commissions from buying links on this page. Terms of use. Netflix added 9.6 million subscribers in Q1 2019, bring its subscriber total to just shy of 150 million. Most of that growth came from international markets, which—as the video streaming market grows increasingly more competitive—is crucial to making sure Netflix keeps growing as it continues to spend more billions each year producing original content. Of those 9.6 million new subscribers, Netflix added 7.9 million paid subscribers internationally and just 1.7 million in the US. International customers now account for 60 percent of the company's subscriber base, up from 40 percent in 2016. The company hasn't quited plateaued stateside, but even looking back to 2013, US subscriber growth simply isn't enough to sustain Netflix's cash-hungry business model. Since 2016, international subscriber growth has nearly quadrupled, from less than 2 million new subscribers per quarter to almost 8 million. Part of why Netflix migrated its cloud infrastructure to Amazon Web Services and spent years building out its own global content delivery network (CDN) is to serve its massively growing international audience. Amazon Prime Video and Hulu have also ramped up the competition in recent years, and an exploding market with powerful new SVOD players like Disney+ and Apple TV+ launching later this year make Netflix's international growth all the more important. AT&T's WarnerMedia and Comcast's NBCUniversal are also launching their own streaming services in the next year. Netflix is in an arms race with competitors to churn out original content to keep its service a must-subscribe for consumers as its competitors pull all their previously licensed content back behind their own paywalled services. The company ramped up its overall content spending from $9 billion in 2017 to $13 billion in 2018, according to its earnings report, and an estimated $15 billion in 2019. And Netflix is raising its prices as it continues to burn cash. In Q4 2018, the company's free cash flow (the money it generates to cover its expenses) hit a deficit of $1.32 billion, up from $524 million in Q4 2017. It burned through about $3 billion in debt financing last year to bankroll its original content creation, and the company said that will rise to around $3.5 billion this year. Netflix's earnings report said it expects to add only 5 million subscribers next quarter, which is a problem. The company is still far and away the market leader, but what about a few years from now? Jeffrey Cole, a research professor at the USC Annenberg School for Communication and Journalism and Director of USC's Center for the Digital Future, said in an interview for PCMag's recent cover story on the video streaming industry that Netflix's strategy works as long as it keeps adding more subscribers. "The whole Netflix system works until they stop growing," said Cole. "How much [Netflix] can spend on originals depends on how fast it grows, and its growth is international. It will hit a wall... The only question is when."
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We review products independently, but we may earn affiliate commissions from buying links on this page. Terms of use. Netflix added 9.6 million subscribers in Q1 2019, bring its subscriber total to just shy of 150 million. Most of that growth came from international markets, which—as the video streaming market grows increasingly more competitive—is crucial to making sure Netflix keeps growing as it continues to spend more billions each year producing original content. Of those 9.6 million new subscribers, Netflix added 7.9 million paid subscribers internationally and just 1.7 million in the US. International customers now account for 60 percent of the company's subscriber base, up from 40 percent in 2016. The company hasn't quited plateaued stateside, but even looking back to 2013, US subscriber growth simply isn't enough to sustain Netflix's cash-hungry business model. Since 2016, international subscriber growth has nearly quadrupled, from less than 2 million new subscribers per quarter to almost 8 million. Part of why Netflix migrated its cloud infrastructure to Amazon Web Services and spent years building out its own global content delivery network (CDN) is to serve its massively growing international audience. Amazon Prime Video and Hulu have also ramped up the competition in recent years, and an exploding market with powerful new SVOD players like Disney+ and Apple TV+ launching later this year make Netflix's international growth all the more important. AT&T's WarnerMedia and Comcast's NBCUniversal are also launching their own streaming services in the next year. Netflix is in an arms race with competitors to churn out original content to keep its service a must-subscribe for consumers as its competitors pull all their previously licensed content back behind their own paywalled services. The company ramped up its overall content spending from $9 billion in 2017 to $13 billion in 2018, according to its earnings report, and an estimated $15 billion in 2019. And Netflix is raising its prices as it continues to burn cash. In Q4 2018, the company's free cash flow (the money it generates to cover its expenses) hit a deficit of $1.32 billion, up from $524 million in Q4 2017. It burned through about $3 billion in debt financing last year to bankroll its original content creation, and the company said that will rise to around $3.5 billion this year. Netflix's earnings report said it expects to add only 5 million subscribers next quarter, which is a problem. The company is still far and away the market leader, but what about a few years from now? Jeffrey Cole, a research professor at the USC Annenberg School for Communication and Journalism and Director of USC's Center for the Digital Future, said in an interview for PCMag's recent cover story on the video streaming industry that Netflix's strategy works as long as it keeps adding more subscribers. "The whole Netflix system works until they stop growing," said Cole. "How much [Netflix] can spend on originals depends on how fast it grows, and its growth is international. It will hit a wall... The only question is when."