Netflix's International Expansion Stays on Course

Netflix released its Q3 figures yesterday and this chart is looking at one aspect of the announcement - the still growing profitability of the international streaming side of the business. The U.S. has always been the main source of the company's financial success, with the costs of getting established in other countries usually outweighing the revenues generated. In Q1 of this year though, there was a big increase in the contribution margin of 'international streaming' and this increased again slightly in Q2 before a second more significant jump in this latest quarter - reaching 17.1 percent. As the chart also shows, these increases appear to be due to revenues outgrowing the cost of revenues (49 percent to 28 percent). Marketing is still a big part of Netflix's international expansion, and indeed, these costs also grew quite a lot, 37 percent up on Q3 2017.