Netflix reported a net loss of USD 5 million for the first quarter, versus a profit of USD 60 million a year earlier, due to the costs of expanding into new markets. The company's revenues improved 21 percent year-on-year to USD 870 million. Subscribers for its streaming service in the US grew by 1.74 million in the three months to 23.41 million, while DVD subscribers were down by 1.08 million to 10.09 million. In international markets, Netflix gained 1.21 million streaming customers, led by its launch in the UK and Ireland, for a total base of 3.07 million. The international operations generated a loss of USD 103 million, versus just USD 11 million a year ago. Netflix expects this to narrow to USD 86-98 million in Q2, as the Canada operations turn profitable. An improvement in the margin at domestic streaming should also help offset the declining contribution from DVD rentals. Overall Netflix aims to return to net profit earlier than expected, and forecast a Q2 result between a loss of USD 6 million and a profit of USD 8 million. This should allow it to launch in another international market in Q4. In terms of subscriber growth, Netflix forecast growth in domestic streaming customers to slow in Q2, for a total base of 23.6-24.2 million. International customers should reach 3.45-4.0 million, and DVD subscribers are estimated at 8.95-9.35 million. Over the full year, Netflix expects to add around 7 million streaming customers in the US.
