Netflix 2Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Strong international growth

“we’ve seen really is just tremendous adoption of on-demand viewing consumers around the world whether it’s Argentina, Brazil, Finland, the UK it’s been really quite consistent”

An enormous moment in history

“we really see that this is an enormous moment in history as on-demand Internet services are coming to the floor around the world.”

Internet brownouts?

“in cable industry there has been constant conflict between the networks and the cable distributors leading to black outs and brown outs trying to figure out pricing. And we would hate to see ISPs brownout or blackout certain Internet sites in while they tried to extract payments. That just ruins the consumer experience this idea that when you sign up the Internet you can get everywhere.”

Little differences in each market

“in every market around the world there are new answers. Just to give you an example in Brazil there is a tremendous payment complexity plus the leadership of TV Global. In Canada, there is the CRTC; in the UK the BBC is quite unique in its role in society. So think of us as adapting to the local conditions in each case.”

Challenge is to understand all of the nuances and become a global company

“our challenge and excitement around company is becoming a great global company where we really understand the new each of these markets and do a great job for consumers around the world. ”

700-800m broadband households worldwide

“700 million to 800 million are today is broadband households.”

Moving to more original content

“big into our margin guidance is our content spend and we want to move a lot of it to originals most of because we have founded it’s given us new brand strength as those shows have been successful and they continue to prove to be successful and let them move down that further.”

So much content being produced

” content is still great and there is so much are being produced you can barely watch it all in our lifetime…So, we are going to continue pushing on that path and originals is going to be a important component of that all the time but we will also I think we would always be a very valuable ultimate buyer for networks because so much of that content is never been seen by the public.”

How they beat a competitor in the UK

“But what we did is we focused on television content, they focused on movies, we focused on incredible streaming performance that you never got buffering, working with all the integrators. And fundamentally it’s a focus thing, which is, it’s everything for us whereas this was a project for someone within a larger company and then now two and a half years later of course LOVEFiLM has folded up as a brand so we are tremendously excited about the opportunity to continue to move forward.”

We don’t necessarily have to beat all of our competitors, just focus on creating our own service that people want

“f you think historically in the U.S. like HBO and Showtime, they are not really competing against each other except for content they are competing to get part of someone’s entertainment budget and in the same way we are like that in the new markets. So, we don’t need to beat some new competitors, we just need to create an incredible service that all of that all of the citizens in each country that we serve want to be part of Netflix.”