Netflix Poised to Play Much More Than 'House of Cards'
The serialized political drama starring Kevin Spacey and Robin Wright is going to be a big draw, fueling more of the binge viewing that Netflix has made popular as subscribers consume several episodes if not entire seasons in a single sitting.
Netflix has come a long way, and not just because the stock has nearly tripled -- up 186 percent -- since the first "House of Cards" season premiered exclusively on the site two years ago. Its subscriber base has more than doubled in that time, going from 27.2 million worldwide subscribers at the end of 2012 to 57.6 million accounts two years later.
"House of Cards" has probably played a major role in the service's attraction of new members and retention of existing viewers, but Netflix is also about so much more than a single show now.
Life Beyond the First Couple
The great thing about Netflix adding millions of new subscribers with every passing quarter and last year's gutsy move to increase its monthly rate from $7.99 to $8.99 is that it now has more money to invest in incremental content.
We'll be seeing that play out in the coming weeks as Netflix rolls out several new shows that members will only be able to initially catch on the premium streaming platform. If "House of Cards" is too gritty, the debut of "Unbreakable Kimmy Schmidt" begins streaming a week later. The Tina Fey-backed sitcom stars Ellie Kemper from "The Office" in the namesake role that was originally being developed at NBC. Two Fridays after that, it will be "Bloodline" -- another serialized drama from the creators of "Damages" -- diving into Netflix's growing catalog of proprietary content. Marvel's new "Daredevil" show will woo superhero buffs in April, followed by the return of Jane Fonda and Lily Tomlin as a comic pairing in "Grace and Frankie" a month later.
Netflix isn't just spending on original programming, of course. It's loading up on movies and existing TV shows, and now has a record $9.5 billion committed to future content streaming obligations. Netflix no longer needs a single hit show in its arsenal, but it certainly doesn't hurt.
We Are the World
Netflix is still growing domestically, but its biggest growth spurt these days is coming from its overseas expansion. Of the 4.33 million net additions that it secured in the final three months of 2014, just 1.89 million were U.S. accounts. The other 2.44 million incoming accounts are international.
More than two-thirds of Netflix's audience remains stateside subscribers, but we've seen the constitution of the platform's user base go from 75 percent American to 68 percent over the past year. That trend will continue.
The bad news for impatient investors is that Netflix is currently losing money outside of its U.S. stronghold. It's not cheap to ramp up a digital platform in a growing number of overseas markets. Netflix does not expect to post an overall profit in its international operations until 2017.
That's not a bad thing. It's important for Netflix to throw its net as far as possible before local alternatives have a chance to gain traction.
It wouldn't be a surprise if "House of Cards" doesn't have the same appeal in overseas markets as it does closer to home. It is a serialized drama about U.S. politics, after all. It will be quite the achievement when Netflix's global audience grows to the point where it's able to justify investing in country-specific original programming, outside the U.S. For now, it's just comforting to know that Netflix has more in its arsenal once Friday's binge viewers surface to go back to work next Monday.
Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. Check out our free report on high-yielding dividend stocks.