This article was originally published by Seeking Alpha on May 21, 2014
By Sarfaraz A. Khan. Research Asst. Gohar Yousuf
Netflix is working to improve the
quality of its service to domestic subscribers. The company is nearing a major
milestone in the international markets. However, Netflix is facing increasing
competition from the new entrants in this industry, particularly from Yahoo but
the former still has an edge over others.
Netflix (NFLX), the
world's biggest internet television network, continues to add millions of new
subscribers in each quarter, despite the increasing threat coming from
competitors.
The company
is working to improve the quality of its services at home while it is nearing
profitability in its international operations in the near future.
Improving
Streaming Quality
In the first
quarter, Netflix added 2.25
million new subscribers in the U.S, taking the total number of streaming
subscribers to 35.67 million, of which 96% are paid members. The company's
domestic streaming revenues climbed 25% from last year to $799 million while
contribution margin increased to 25.2% from 20.6% last year.
Netflix is
working to improve the speed and quality of its services to its growing pool of
domestic subscribers. The company has signed
deals with two of the leading internet service providers, Verizon
Communications (VZ) and Comcast Corporation (CMCSA).
For subscribers, so
far, the results of these deals have been mixed. According to Netflix's ISP
Speed Index, in April, Comcast's streaming speed increased by 31% from
April, last year but on the other hand, Verizon's FiOS and DSL subscribers
witnessed an 8.3% and 24% drops in streaming speeds. This is shown in the
picture below. .. read full
article at Seeking
Alpha.