Netflix (NFLX) 16 Apr 182018 Q1 Earnings call transcript

Company Profile

Participants

David Wells	CFO
Spencer Wang	VP, Finance & IR
Gregory Peters	Chief Product Officer
Wilmot Hastings	Co-Founder , Chairman, President & CEO
Theodore Sarandos	Chief Content Officer
Benjamin Swinburne	Morgan Stanley

Call transcript

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Spencer Wang

Good afternoon, and welcome to the Netflix Q1 2018 earnings interview. I'm Spencer Wang, VP of IR and Corporate Development.

Joining me today are CEO Reed Hastings; CFO David Wells; Chief Content Officer, Ted Sarandos; and Chief Product Officer, Greg Peters.

Our interviewer this quarter is Ben Swinburne from Morgan Stanley.

Before we begin, a reminder that we will be making forward-looking statements and actual results may vary. turn to me first for let question. that, it Ben over his With

Benjamin Swinburne

I you, ago. about to results you. did may want Thank Reed, what to ask is today quarter, it a be different company two again talk given little the bit years what X, doing that this strong the

from into are maybe quite You can the of scaled that scale markets business, particularly you've bit markets different the hit a as developed that you're moving a already.

Wilmot Hastings

to than similar in talk then more shift some local that been around lot that know is all different. the the we've invest a doing about It's viewing. been we're secular we've going shows to of. content may world investor remarkable. continuing it the base breadth certainly got U.S. content, want that And of less And We're just towards our Internet the really some product, marketing, seeing of of doing. you things we've is There's maybe, Ted,

Theodore Sarandos

We've XX And Yes. over for shot continue expect grow. launch who've to local that in content for programming world the producers actually series in with that original local great the we've global countries date, language country found and all original to to region, we able is or the it's different been to but success.

examples well made Brazilian the Brazil, of This of even super quarter, scored season we world television and maybe which Portuguese the it is around example, coming way about Brazilian local-language first have world. in for of a show though excited working by season new people a really the around one new for up, the of sci-fi that we've and X% are us,

part thrilled -- to of it's So really that. we're be

Benjamin Swinburne

now of the scaled the look model these you're markets does bit cycle you Reed, we for really but go-to-market you've India in emerging a than, U.S., some quite partners for mean, seen in that where, a distribution markets? you or financially what look Comcast David, with you in say, at of Could a markets at? market. like look other towards the we've where might emerging this numbers the life earlier Netflix faster what working maybe strategy how with in move And partner market might And

Wilmot Hastings

Greg, I'll let you take that.

Gregory Peters

Sure.

bundle to retention, And new groups service whole new very, we've we of the Comcast consumers, about referred economics the acquisition with way in strategy, years on be for models to and partnering it with a that in hugely these those, across And started partnerships. an is to we I'd a out those the starting successful that manufacturers on say, see last quarter, But to with fact to CE with their is Our we them very of and started seen and up great operators, find history that's have the several and partner more. the we've sign access watch you what Internet television on these that based And last take both over providers, rich to if partners it to up love of wave that MVPDs, announcing evolved all products, been beneficial. and in. characteristics we've new the Sky with for can evolving we've more integrated manufacturers, with you've where service make now work operators, mobile and markets serve seen to access the sort we trajectory us. easy Netflix, the

been these years, our all So markets shift But only you'll but markets. across in many that of us the see in not also consistent it's we've sort of in markets. leverage evolving new strategy a that for

David Wells

forward. going prospectively about ASP Netflix, we To for about I net going a may in is international has revenue discreetly a book basis. position all for grow, and forward. Ben, they meets start basis. say, basis. today. where other affecting GAAP there's some of on is out a revenue very the just the economically where for consumer couple occurring, then, financially call on visible perspective adding it -- a And these around actually accounting, versus you And agent net revenue deals we're always that's they're in always letter subscribers say not that or on might But gross these for date, a wrote we I this we're would technical If cards, outside we'll of position. price always the Netflix principal would conditions, to a point But revenue where growth prospectively has Netflix investors on of immaterial added these forward gift the

Spencer Wang

Ben, maybe, front. on could And if just add I that

of pretty a In past difference. is financial with presentation is they're obviously, terms of David consistent our economics, the about talking underlying partnerships. what more really And

quite perspective, really the operating similar, an from it's So income impact.

Benjamin Swinburne

partners? aggressive taking India, Yes. What points, a or about about market approach a perhaps it's again, retail lot either more with emerging markets think pay-TV you mobile level lower the with If wholesale a like in TAMs. larger on in price than the a opportunity

do a is what distribution sure for perspective product So then, pricing do you Netflix think attacking Greg, thrive mobile can a market if that perspective. about and place that you from really make on? from a to differently And

Wilmot Hastings

the happy different in to pricing XXX pricing, On the our with we've in XXX INR results India, been our countries. on INR very

So plans. no near-term

always are And Greg, more Of we time. course, over over mobile. on to learn you to trying

Gregory Peters

us a to of want to of basically experience who only Yes, a on and device. more mobile consumers group and have with then Netflix we their relationship have mobile access definitely want access market that allows to a which

we you we incredible think so connection, can you these if network really that making that video when sure -- just shows whether you've very that remarkable have download there, connections. is very encoding for that if launched, do on ultimately, so investing experience we where bits save experience or fits And to you that a or and to something a get -- so data the mind, that your down to, you which connection want is enjoy have markets great download other But global on mentioned, still want plan, efficient, and those or And feature able have really capability we're world the members of, things drive a to spotty a our to we quality lightweight my our network that more that it a else, enough it's incredible product are stream even sure data can where it's that's a also quickly is have in And apps they on even load plane suboptimal very, you I you're the some making but less-than-great ways. connection example you various that something great allow getting a been mobile like in benefit, efficiency even in to no offline. hopping that phone. save video where even that -- our whether are in our used model, differentially emerging it's very, around

Benjamin Swinburne

on should be And the we top about? that pipeline excited what's product Greg, next,

Gregory Peters

One -- our content we're to working There's out. investment different on, us area for call is building new but side. few relatively support stuff of that for a is maybe to a bunch technology

members can is, and perfect shows? that we we the produce we're content How that high components. bring this outcomes programming speaking, make, innovate grows super amount make them bring launch more. whenever we amazing they see a obviously, and library a about for and And in? piece influence more of of But do a for innovating then grows, can around we how efficiently. how Netflix? bring content. around an So leverage that. do even so the all And greenfield to excited content so we And day think us do those How as do access opportunity watch relatively, the I accessible do about you're our members technology lot language they're even us better grows us what to going world, point we to think, our territory to job choices we they're new that And whatever to those every that's whatever we bring to of to almost

David Wells

to studios as in Ben, And say third that related the is investments G&A area Ben. you'd the of growth our go. some Greg, you well, before is see investors that

it's that we're calling -- we're our technical So in side out saying, also on studio the investing buildout.

Benjamin Swinburne

were, about for us year. the Maybe say, where Let the the bit what budget the you're you me quarter changed the commentary we a you've of what's or about back David, you, could letter. up taken OI financial thinking relative to to just little the in come talk in January. and for presenting and guidance in -- sort to

David Wells

way predict. changed the Well, business outperformed really, in didn't what's is a we we've that

it, if has grown over look we've degree, some that that business some our and, some operating that some the that But investors of to just that goes of up of I benefiting overall of the faster content, X redeploy reinvest just at in lead redeploy the in to content. able shows towards from We're but able than and of higher think you there's into and expected. business. of to So of sort marketing that long a time associated We're are to it it, outperformance margin. some quarters, last the growth

marketing XX%, well. and sort a acknowledgment growing lot back-end-loaded we've the to half we this is this business content think and So that of of it's I year, of and posted second got somewhat the but XX%, so

Benjamin Swinburne

that function year, of of better I is marketing Marketing the back is Why in half the a it, the guess a back-end-weighted? particularly or weighting, just of timing way put content? to back-half

David Wells

the timing It's just mostly content. of

QX a coming got and Ted that great we've up in sure can talk lot So I'm about QX. releases of

Benjamin Swinburne

are your more also, news-like on to thinking impacting move just either executing guys how news or of think a the a Ted, forward, focused seems may be category it you sort spending type be business think today about of love like you the let's little that strategy from you is those of what perspective to Yes, or on. Talk and programming ahead going I'd time content we some actually because And programs. you about should then. hear

Theodore Sarandos

again, expand we've documentary into news audiences. Well, has documentaries, misreported to move -- over into we're with (inaudible) But and over not know, as with looking been you our pretty great -- short-form both Why successful things for have and been the news in we this XX beyond quarter. we're Reasons upcoming a doing exciting particularly the that that and documentary. of new are long-form out I season feature think coming work quarter, in The feature-length

Unbreakable one first season Cage Kimmy returning -- Schmidt. The the seasons really XX watched People, last Reasons shows of thrilled Luke like so Why year And our world, the of around most of new GLOW, year we're of the was that. season television Dear about and White hits

favorites. Rain, film Denmark, Rock, called from from We have season, a feature called Sandler is Week fan Santa Adam this Clarita quarter Of. The new X%, of Series which mentioned to over of world. Brazil, I And then earlier And we a a comedy really we've Unfortunate and great brand-new, started but Chris well for also up the coming of play Diet, Events lot new seasons and series a with already with original going real got The that think all we've

Benjamin Swinburne

direction. together that at Ted, that some that of slate as also sort bigger I and the working role stuff live look that's about of topical. in programming a maybe there's news, the time? on see example real [possibly] Letterman is Do And not over Netflix a been an playing product content moving discussion in you the Obamas

Theodore Sarandos

great like of The host, form a topical show not mostly, absolutely, -- a talk entertainment. they're David mind keep that you Those entertainment. interview Letterman shows that a but is are are newscaster. in

can't any we'll the that. in And now. So or other negotiations do deals more definitely of states Obamas would that various I of be comment right on

Benjamin Swinburne

some to on got about festival the controversy I've Okay. the film also side. of ask you

around source, You've this Netflix's about been Can attract seems relates it pretty given theatrical think lack talk impacts as the the ability outspoken talent, content, to film, be in awards? is pushback you you Cannes industry releases of to it situation. there some all where to Do headed?

Theodore Sarandos

last in I kind it's the that we for and theaters so in with norm. want distribution that we generally, addressed become letter, just Netflix. to what We business I'd see more And distribution by be room not want the people -- day in of released be year, -- be -- the part speaks love. it more day as and Cannes in And And is you making to defining accepted great them itself. XX say, we think released we've are Well, of films about in. films we

Benjamin Swinburne

thought awards no to sure might releases be gets that order a them? wider about at that So -- your in important talent shot to an make

Theodore Sarandos

Oscars We had all keep model, five nominated mind this released last the projects for in Well, in we so. year.

Benjamin Swinburne

back Okay. David, the coming financials. to back you, to just

quarter cash the along $XXX burn maybe think I those in lines. something million, was, the first what,

billion You're billion. the is still come think Is still of $X lower Could guiding to that you you in at to $X the right that something end range? that?

David Wells

could. are, talked I the think related content Of and We're is about. we projecting loading course, to that just we back-end we not that it

So still cash to to $X billion the in was be of $X in and you in anticipate that we billion. to the range QX, content terms the points end, to to the back -- relative timing $X.X heavier shows a billion or modest little being but

Benjamin Swinburne

end think quarter. I And the XX, on content of obligations nine it I was the Okay. the believe, or at contractual obligation, front,

of So derivative slowdown a we a bit little second there. are seeing

more spend, maybe look there that As I should the you starting plateau, of even we we're sheet numbers move percentage off obligations believe, liability? total what that a the that to decline. to yet? towards Are Is original balance when at you see number, in start as

David Wells

Netflix. I other mix components. X to asset content think easily shifting or on balance is that for think, the is more produced assets components incorporate I X -- people, the Ben, Well, [owned] the most to component sheet. I One streaming assets, or the at verifiable externally our look that film obligation, our but produced value want we're assets

what the or but basis, is we towards that. lower derivative saw the a account hold second take though to think even And see aim us business so business that to It's to try that. hold, the I want on per-member starting even don't both like a to are per-member grow that towards you year-over-year. not we some you And I of into taking --

Spencer Wang

question. shift to total likely self-produced add, obligations. Ben, in to just answer your And to will result slower the The in narrowly growth

that content are content components [like] there obligations of However, participation. the self-produced also impact

Theodore Sarandos

Multiple-season [inaudible], commitments yes. in

Spencer Wang

Sure.

David Wells

relative technical other a modest just Spencer, It's components. and are point, to But meaning I right. Ben. the that's annotate the of whole would bigger that those some

Benjamin Swinburne

there, rapidly. Reed, China shifting partner Makes a in -- you in have your updates I China? a on but on know evolving that Have opportunity? thought market quite strategies about sense. thinking dynamic the It's you all that any market. is at

Wilmot Hastings

with IT comfortable No. HBO of that is way should shows and You that's we in enter strategy our mean, now the late? so does, the very public, licensing We're our China strategy.

Benjamin Swinburne

TV just to fully sense. and Or much some OTT new the television the think model? Okay. think market's take this new, the do of of Do OTT is sort an way the is view do on Internet services the lead TV channels distributed Makes we've not to how along have services had Coming starts these a to the of to or OTT consumers far this back -- Roku's Internet many you the XXXX sort as market like it sort on not path, pretty in U.S., equivalent you platform. you Reed, got to the are a example, pay-TV here. as to long fragmentation fragmented choice network mature? will marketplace? have more a we of going spot business term, have extent.

Wilmot Hastings

think some thing called your now or will. of create apps they'll form great -- will be on and network phone as to app, I a the television video, is think an easier Well, most apps it's have all of

some the And a phone entertainment mobile operating Rokus. television And TV like are movies energy of you with all will more some spread which options, so and wide spread systems to see just very interactive. of are of shows, that

to tail. But to apps getting one a the course, on rich, home mobile it's whether television long see phone be very television. has And the close look the if nearly want of of see you phone on we or So I we that on think very their everybody you'll screen, again, at and ecosystem, that's that. the

Benjamin Swinburne

of Netflix XX over broadcast those of then we Because started way scenario? the and our through TV, it term And with you fragmented to continues next what to networks large just what saw and engagement on kind years. you market sort or bigger over of the happens pre-pay-TV, of started we that in X do the NBC the in XXXX players? to think engagement consolidates CBS before XX the Is sort in to evolve? XXXX networks grow around Or longer

Wilmot Hastings

it's execution. all and Well, up to us

a the some really are Others like You're focused culture. world, right are, on particular so that around especially different Sky in many which there or competitors, many are cultures. of

entertainment produce And or it has consumer up options. grows serve we to, the beautifully? shrinks share So really content, well, that lot is whether of then market up our it of a great if time, get lazy And do else. or more earn we that then if we'll be consumers' we just we slow, And anybody run really of grow. if over, to we continue well, like do

Benjamin Swinburne

challenge the that you do the So view for how then at keep we and year-to-date, the a Ted, as of the I'm you organization think guys stock, speak, to What company, and XX% the complacent, getting it biggest all staying out size look and throwing from output? there's maybe got -- some figured Reed? managing over is have sure for out. what you I motivated, up ahead the there probably

Wilmot Hastings

the some great of of terms fraction that, to. want long hours we about we excited of very we're to We've in way a viewing that the all viewing of and TV. We're hours viewing but earning YouTube. of of linear a momentum, of go a We're have of fraction the got

Theodore Sarandos

great picking been to them and producing like, in figuring focused at a their pick can't think, XX production to in keep them they earlier, licensing like great that place choices, giving the on, empowering people, fandom people in, shows their of think around the become to mentioned them with intense can the trusting I work, both out continue make we've people really that content just -- content original of up which And and really, and end about day the U.S. mostly the world, countries bringing around and to original winners in without, day out. of of be what I've And great the I it's trusting we scaling Yes. will that day, the live who those world. the terms them and associated kind and

Benjamin Swinburne

And then, that priority and at have the you year, spend a money product around it so world? the billion $X.X make book going Greg, is when from guys you this best look or dev tech in the where perspective that the can for be members to

Gregory Peters

we're at a Again, as before, it looking I perspective. global product mentioned from

we that consumer So significant solution around pretty think there's as trying leverage one needs provide by set consistent that we get a what to of the see we against world.

different obviously specific many get trying say, general we again, that cases, and our leverage. downloads different these they that react we're markets like high we, cases, mindful a Now in there's how prompt, how need but to in markets to that those be to in consumers product, solution learn use things a

So learn, to looking the them, at a listen in way react then we're to really that's world scalable. from opportunity place consumers, globally. a The understand to but is

Benjamin Swinburne

M&A, think of in than what seem but press can't not, be philosophy the Spencer. the areas past. reports, you and you lot There's Outdoor's and just I'm over M&A been about company? might here growing might been Can what assets comment about it's States. going more sure as your specifically, over like sense, in looking talk Maybe of you Europe, forward it the does make guys acquisitive on I Netflix in to think, variety about studio assets, anyway, a potential may

Spencer Wang

Sure.

that So XX-year transactions. since only very if quite the few done our is in we've one low bar history. look we We've path, at done

the we to being find grow I M&A that So for based interesting takeaway see record, help track do tool us to on help assets business. That think perfectly for fine as have strong to we that a the bias investors over is a buy. build said,

us that So help other service from can on lookout to faster. related the assets perspective, IP our grow the improve or be we new continue help and for

Theodore Sarandos

add we're our book. example, And first first released in way I'd of we Right. the acquisition, just by Millarworld Spencer, our and Academy just production comic on Umbrella already production that with

very So meaningful in tool. useful terms to of be acquire using this could a IP, a M&A

Benjamin Swinburne

differently licensed move talk Maybe with sticking little market, you product content? to a third-party to and or whether is bit the the and bringing others as product, supply drying their thinking acquiring Ted, about you, can for Disney closer up about own market you're

Theodore Sarandos

move windows more it's for investment, working we're grow years. also been level and demand which less seen but moving original -- third but way. percentage pretty that both our quality view that and produces content a same that we're us, doing helping in in producing absolute, windows been the as programming, original. that into us both sometimes it's Well, at It's dollars over -- that the And ecosystem grow of more licensing buying up the you've means business, hours, us and investing aggressively of we're we're it own of our a in the been had that's second product as content isn't in

less the things are in we're more them. So selective, there's bidding of and engaged on that

like mix -- a the world way other and the of that world lot So lot People our the shows in the though, by movies there's television and that of around content around territories. when we're v. license The we of are O.J., and when example, something great -- certainly licensing a is for -- up, from great, content still

You produced moving more should secondary into fishing the and market. in more be versus us expect license programming to and original

Benjamin Swinburne

the sourced ordered Jessica change their at all think that just changes season Disney? think are happening side, a about Marvel on renewed or I And content the and Jones the new how there of Is you from given Marvel. you in continuing any strategy guys

Theodore Sarandos

continue universe I as universe for The with to as up quarter have this and want to No. those We're for in not we wonderfully programming get -- will Cage could we Luke of coming way we and making Defenders long said the it keep great and business and, Jessica a new them, let thrilled would And our be season. expanding a the great customers. quite models try making

Benjamin Swinburne

been more maybe or it's more obvious don't at being reasons? away if of Any just from from aggressive and look I Hulu, which know if you're getting that kept prior-season kind acquiring for stuff impact content? a you has

Theodore Sarandos

the we've of No, broadcast that originals, some the doing they've I many, on closer think mix, and where been -- I the them. model, Not -- mix has way. in mean, what on but gone been to ones in business much there few a the been we've their with they're too, where that's the going more other after select

Benjamin Swinburne

for And into originals. and guys for also you, continuing you Yes. push David, are to local

an efficiency that had English this And this local do typically financial think from slate for are you native? locally. about local Talk you believe, not talent on not from perspective, obviously develop David, to -- those returns an you where to shows which hard you how all think for and/or find I that I it content? originals. source Is the of year, about XX

Theodore Sarandos

We mean, least saw just from quickly local doing that, with a seen What's has were spinoffs accurately Dark in make I pleased been to great be well. as Casa those IP, it and -- at and word those our and numbers at numbers best, De show -- we've dub, Casa or We've global. sequels really foreign-language anywhere we'll to big better U.S., the at those content a of us been the all released the ability with really see bring for Money come. those that our the that and things X% And U.S. great Papel and we'll like particularly technology to can and, in as played earlier. the producing -- world. better Papel very U.S. the years in we the show getting De bring artfully, original cable around would like rest to hits shows story a of from Germany, for And those world us be successful which on can mentioned, using numbers for know-how on we've subtitle and Heist, bought to is so that I pan-regional with the and series

it X% of scale has that's And if recently from And Cable country, and global it. the the it scales it's and on Chicas country, we're for we've built it the it's like if Spain, -- it's what gets del seen been, a viewing thrilled So with connects outside if it viewing, and that's great. Dark wonderfully. in

Wilmot Hastings

Ben, we're on And and quality. investing to also the work support that subtitling dubbing

off the at quality investors Rain, we out The just should pay series Danish what -- coming think because to weeks, to world Swedish, few film So check a and world. all really a dubbing be, titles in making coming out is big our there sorry, out which look we're will approachability the of in the investment of could that these from the

Theodore Sarandos

the is audiences down so the of off are too, good, local it we're not trading think, to stories I local all if things that are you travel storytellers of the aspect show it, telling not local make see nice -- they and one we're globally. watering travel. These Yes, at for

I there's less Danish nothing to And a to German hard And cast. able Rain. global access and Dark, a incredible with full producers find mentioned these find. we've are, mean, like that and Brazil, you Portuguese, world been before, I and not had said, around pretty earlier, there's them is less not audience nothing there's in about have storytellers about effectively. Brazilian just the So to

David Wells

what Like that Ted on Reed to world teed have connected. for up just and and drafting off financially. last connect one So just a more that's is, we're Ben, becoming global more

we're quite a And non-English of their a in to stories production local or outside other TV to which translates market. developed expensive -- a cost local from that storytellers U.S. some to able cost. tell And so it's are for fraction in still, relative it's the we're many the but elevating audiences storytelling market, gripping increased in ways, the

sense And that the because it I'll some so times, really for point margin. opening up equal it we're the couple We've sacrifice for and Netflix doesn't this content way transportability excited really that necessarily doesn't translate a margin about in a made new across lower of of make the again stories that Netflix. more that it's of local in but television world

Benjamin Swinburne

those that connecting maybe that connect two high popular Ted, again. if a And fairly original points connect it's to is globally? locally, the is locally, local correlation going does

Theodore Sarandos

travel particularly. they the that in in shows, don't they're production we interesting travel. market XX% XX%, the not quite they're most don't incredibly a what hyper-local for that well. shows, the It's particularly, do large-scale topic particularly part, do -- penetration well, But Not just because on some that found travel but is,

Benjamin Swinburne

David, have versus There's of not you spend this that's year. the marketing how you letter, a terms leaned for behind think in and budget -- your clearly What viewing, years? are pivoted, that not the how you. next new the in dollar? about to spend phrase you've is are over which guys investing but mean thinking -- marketing marketing relative pivoted marketing content You thinking does the of of ahead incremental I right, to density in about your -- content couple

David Wells

of be precise of more terms equates joy, speak you that, I it's Well, density, in need is because a title it relation but the I to think of a -- a to world XX% public that to term, bit in don't may let Reed little I'll think watching. it

speaks title love may of population correct. a You of But people density. is watching, a to particular and that you're that XX%

all. bit lean that some it sense of, sense, of going into heard it and has do one marketing, is very website of sort and need no the definitely of more create the I to we as We and titles a can't promotion, these more common of, more have little in we're leaned on to think more

So results decrease leans some a is, content to nod don't that and expect should We perfect we'll the on the of you that turn us. things. ratio marketing increasing on increase that's that spend. going the and that you're company think towards think I I them experimentation. point that terms we're in we of spend maybe then a We We try where as know over, forward, from seeing based of see in approach or

Benjamin Swinburne

a span. Because would could this spend? of content that a slower to maybe somewhat really of if we given in limited you only much a so population. you're a lead have attention for support that lot marketing, throwing all assume Does idea growth I there's

David Wells

Well, for coming I does that not is operating or you're where than sure. mean can't will I'm marketing revenue go grow sure where seeing definitely and say content -- that's than marketing? faster faster margin it from. content than already, content faster

trying forward. Reed, if, we're along Ted annotation know think right don't not. way you the have that to of But on or I sort going point a feel if I to or our

Wilmot Hastings

that's content should that you learn, if for also, to as versus countries, it seeing and this David and plans and value in this more what We're part of growth, the have said, original you're so less continue. hey, expect the put of different increases We how to big And marketing what the viewing is results? are trying new franchises. opening, new realization, in we our

Benjamin Swinburne

contribution XXX over -- I U.S., business your marketing, million as business internationally a David, state"? talked view do the the think "steady view about positive and members, shake a where have that long-term you a profit to do for out And we your margins about you this you already the has have now mean, as in -- --

David Wells

for -- behalf we're of and in I earlier I think in speak America granted. only other That question the asked bag this -- of confidently being our team, take and all Asia. could that Latin Well, opportunities you growth Europe in we about a puts I can that, sort presupposes the don't on

X, and lot really to about opportunity the targeting sure the not a business think the that could we depends basis the I markets. goes. big know It XXX we The are, we're years. on pace where XX and We putting hard after for growth of So a the in we're we down. have business are certainly X still It's scale of that that say on in X this our opportunity, been to XX points. years. XX for core markets or higher a We're year. margin be. bigger would We've been that of X, we've in

big past a territory. the that scale grow, the in say got we and competition within not by dependent that growth of at we've dependent margin. me the a bound on It's on heard international and somewhat business size somewhat market It's You've think we as the we're lower opportunity. being

would it I leave So there.

Benjamin Swinburne

implemented You of, or think over ASP guys the call, Makes sense. have to seen going time? think last increases. growth would And you way Reed, adjustments over Is price forward years? several number we've how I a do successful what growth the about ASP price about of sort what

Wilmot Hastings

our quality really it others. the of Well, relative offering on the to depends offering,

bit basis further because from first spectacular it you to more able see. basis. you can by earned on doing But to more that first people" get rather "have wants to that, have a everybody we're pay and do it content But always a than little a approach earn more we we So viewing price-first then invest people if to improve. you

Benjamin Swinburne

talks the I adds. strength about quarter gross from, coming or letter the The higher in additions think,

do your is to you there here? hit, materially going work So from probably be back business that's to of an some guys have maybe, change? David, on at markets, in opportunity to hit you just to coming level older can churn Or the churn, tough least a lower retention think you

David Wells

asymptotic close hard. pays time. made on feels we're in who improvements, it's in and we've terms markets, to I to stays over established pretty in we're good all it -- break or paying member us color out that say, noise who that to we're a comes we're getting got focused but some in mostly before, of we order Well, We point that, with improve on still focused point, and basis a can newer engagement and point In like XX but it's improvement retention. engagement even marginal engagement to really churn do a up so increasing we be that return, newer certain XX we're feel that diminishing that the in growing meaningful. that obviously is markets, between relationship a there tight of many enough the markets us the mild commentary. but that and about or because having We about Again, we've would think big give churn. these this young

Spencer Wang

I have question. one last we about Ben, for think time

Benjamin Swinburne

didn't want focus how you by the last industry, if -- over regulators, the going your to use happened for by you think Netflix? Netflix, the implications in what's tech all drive Sure. you making months of to for are given you privacy, of data, couple Reed, without business, from from data anything consumers any, end, any on think GDPR. of mean to all If changes? a and the what What this are you. just get does back I this let sense the And

Wilmot Hastings

glad our business We built but very very ad-supported the to ad-supported of we've to We're the not very that Well, always protecting and I'm viewing. members' been advertising. sell we be all different from subscription. be businesses, on don't big

I the So issues then, and billion out that the in content point that inoculated second, marketing from over great. we'll on that's on billion other and we're happening I'd industry, think And substantially $XX and are tech. $X.X spend

So we're a media company than in pure just much that tech. objectively, way more of

of to both, companies. we pure want different tech the from really course, at but Now be we're great again, pretty

Benjamin Swinburne

Great. Well thank you, everybody.

Wilmot Hastings

investors. our Great. all Thanks, Thanks Ben. to

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