Tuesday, October 25, 2011

Netflix prepares for landing in Europe next year

Netflix said it will launch a subscription service in the UK and Ireland in early 2012 , offering unlimited TV shows and movies in streaming or transmission over the Internet. The service will be available to consumers through a monthly subscription, Netflix said.

The company said that details of the service, including price, content and compatible devices will be announced closer to launch day.

It is hoped that the company expand its services to other European countries, including Spain , shortly after landing in the UK and Ireland.

Netflix, who was born about 15 years ago and caused a stir in the field of media and the cable with its simple but effective service DVD by mail , is now trying to regain its foundation by emphasizing its service streaming movies and television programs.

We anticipate that the cost of our entry into the United Kingdom and Ireland do not allow us to be profitable in the world

However, the company lost in the third quarter more customers than anticipated and warned of more defections, causing a drop of almost 20% of its shares , at a time when the company struggles with the impact of rising pricing and other unpopular measures.

The leading U.S. video rental reported an increase of 49% of their income for the third quarter to 591 million euros (822 million), beating Wall Street forecasts of 584 million euros (812 million dollars ). But investors are aware of how the company led by CEO Reed Hastings has driven away customers in recent months with rising prices and other flashy slip s, centered on the warnings for the fourth quarter.

Netflix shares slumped almost 20% to 68.75 euros ($ 95.50) in trading after the market closes. "Breached slightly this quarter by subscribers and their forecasts are not all good. Those are the two points that are pushing the shares," said Gabelli & Co analyst Brett Harriss. The company also forecast a loss for the first quarter of 2012 at a time when it expands into Europe.

"We anticipate that the cost of our entry into the United Kingdom and Ireland do not allow us to be profitable in the world, that is, domestic profits are not large enough to cover both international investments and pay general and administrative expenses global development and technology, "Hastings said in a letter to shareholders accompanying its quarterly report.

Netflix also said it had lost more than 800,000 subscribers in the third quarter U.S., more than the 600,000 that was forecast in September.

The actions of which was once the darling of Wall Street more plunged more than 60% since July, when Hastings announced a price increase for subscribers who wanted to have the services of streaming and DVD. A wave Cancellations hit the company had been famous for its strong growth and loyal customer loyalty.


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