Growth at Netflix ‘Just Expands’ Entertainment Market for All, Company Says

​Netflix streaming membership in Q2 “grew more than expected due to our amazing content,” the company said Monday in its quarterly letter to shareholders. Netflix added 5.2 million subscribers in Q2, including 1.1 million in the U.S, and 4.1 million internationally, it said. That compared favorably with the 1.7 million new members it added in Q2 a year earlier, including 1.5 million internationally and only 200,000 in the U.S. “It was a good quarter,” the company said. “The competition for entertainment time is always intense, but the silver lining is that the market is vast and diverse,” Netflix said. Linear TV “is still huge, piracy still substantial, and there are thousands of firms and approaches around the world earning some fraction of consumers’ entertainment time.” So “broad” is the entertainment market opportunity that Netflix has grown from zero to more than 50 million streaming homes in the U.S. in the past decade, “and yet HBO continues to increase its US subscriptions,” the company said. “It seems our growth just expands the market. The largely exclusive nature of each service’s content means that we are not direct substitutes for each other, but rather complements.” The “large-cap tech companies, especially Amazon, are investing heavily in original and licensed content around the world,” Netflix said. “Creating a TV network is now as easy as creating an app, and investment is pouring into content production around the world. We are all co-pioneers of internet TV and, together, we are replacing linear TV. The shift from linear TV to on-demand viewing is so big and there is so much leisure time, many internet TV services will be successful. The internet may not have been great for the music business due to piracy, but, wow, it is incredible for growing the video entertainment business around the world.”