Netflix increased profits in the UK by over 37% over the last twelve months as revenue by 44% at the SVOD service also soared.
The company, which has produced a raft of British series out of the UK including The Crown and Sex Education, has posted its financial results to the end of 2018, showing significant growth. However, the numbers are only a small portion of its total subscription revenue – Netflix has around 10M subscribers in the UK – as its international headquarters are based out of the Netherlands.
Revenues from the UK totaled €48M ($53M) in 2018, compared to €26.9M the previous year, while profit hit €2.34M, compared to €1.5M in 2017. The company also received an income tax credit from the British government of €57,656.
The company has around 50 live original projects out of the UK including recent London gang drama Top Boy and forthcoming soccer drama The English Game from Downton Abbey creator Julian Fellowes. It has recently stepped up its ambitions in the country, hiring former Sky drama exec Anne Mensah as well as a raft of non-scripted execs.
However, the digital platform warned that these figures may be hit if competition increases in the UK with a vague warning about British rivals teaming up to compete ala Britbox.
“Traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet e-commerce or entertainment video providers are increasing their internet-based video offerings. Several of these competitors have long operating histories, large customer bases, strong brand recognition, exclusive rights to certain content and significant financial, marketing and other resources. They may secure better terms from suppliers, adopt more aggressive pricing, and devote more resources to product development, technology, infrastructure, content acquisitions and marketing. New entrants may enter the market or existing providers may adjust their services with unique offerings or approaches to providing entertainment video. Companies may also enter into business operations or alliances that strengthen their competitive situations. If Netflix is unable to successfully or profitably compete with current and new competitors, the business will be adversely affected and Netflix may not be able to increase or maintain market share, revenue or profitability,” it noted in its results.
“Management believes that the risks, when combined with efforts to mitigate such risks, are within the existing risk appetite of the business, suitable for a business in an investment phase to grow the business,” it added.
The company also warned of facing potential changes to government regulation, as called for by Wolf Hall creator Peter Kosminsky, who said that there should be the introduction of a levy on the SVOD services.