TIME Gadgets

A Built-In Roku TV Is Coming Soon

The Roku 3 television streaming player menu screen featuring Netflix, Amazon, Vudu, Hulu, and Redbox Instant is shown on a television in Los Angeles on Sept. 12, 2013.
The Roku 3 television streaming player menu screen featuring Netflix, Amazon, Vudu, Hulu, and Redbox Instant is shown on a television in Los Angeles on Sept. 12, 2013. Bloomberg/Getty Images

Available in September

Roku is working to streamline the video streaming process.

While consumers have long been able to use a Roku box to watch streaming internet TV on their screens, the company announced Tuesday that it will bring the screen to the Roku, with its first ever built-in smart television available in stores come September.

The Saratoga, Calif.-based company is working with Hisen and TCL to create a line of Roku-powered TVs that offer streaming options from thousands of apps — including Netflix, Hulu Plus, HBO Go, and music sites apps like Pandora — just like the box version. According to Roku’s site, pre-orders are available on Amazon.

The 32-inch to 55-inch TCL Roku televisions will be available for between $230 and $650. Hisense will be offering four different sizes, ranging from 40″ to 55″, although prices have yet to be announced.

TIME Earnings

Netflix Crosses 50 Million Customer Streams

Updated July 21 at 5:38 p.m.

Netflix’s customer base has passed 50 million members, the company announced in its quarterly earnings report Monday. The streaming service added 1.69 million new members during its second quarter, bringing the total to 50.5 million customers and generating $1.1 billion in revenue, slightly missing analysts’ projections of about $1.2 billion.

The company had earnings of $1.15 per share, missing projections by a single penny. Overall, Netflix generated $71 million in profit, triple the figure from a year ago.

In a letter to shareholders, the company touted the success of its original programming, noting that Orange Is the New Black is now the most-watched series on the service in every territory. The next shows on the company’s production docket will be the final season of the cancelled AMC show The Killing and a new adult animated comedy called BoJack Horseman, both of which premiere in August.

Netflix is also planning an aggressive international expansion later this year. The streaming service, which already has almost 14 million customers abroad, will launch in Germany, France, Austria, Switzerland, Belgium and Luxembourg in September. Netflix is prepping some original shows aimed specifically at foreign audiences, such as a soccer comedy that it will air in Spanish.

The company reiterated that it does not want to pay interconnection fees to Internet Service Providers to get its video content delivered to customers, an issue it has tried several times to fold into the zeitgeist of the ongoing net neutrality debate. “In the cable industry, there’s been constant conflict between the networks and cable distributors,” CEO Reed Hastings said in a video call with analysts. “We would hate to see ISPs brownout or blackout certain Internet sites while they try to extract payments.”

Netflix has also formally opposed the proposed merger between ISP giants Time Warner Cable and Comcast, unless the two companies are specifically banned from charging interconnection fees.

 

TIME Television

Community Is Graduating to Yahoo. Can It Get Even Weirder?

The NBC version of Community, which will return on Yahoo in the fall. Vivian Zink/NBC

The search-engine-turned-content-creator saves the cult sitcom, and gets the chance to show that streaming TV can do a network's job as well or better.

It skated on the edge of cancellation at NBC for five years, then finally fell off. It flirted with a resurrection deal with Hulu, then it fell through. But now, having promised “six seasons and a movie,” Community will be able to deliver at least the first half of that promise, thanks to Yahoo Screen, which you may not have known was a thing until now. Under the terms of the deal, Yahoo will make 13 episodes of the series, with creator Dan Harmon and the full remaining cast (not counting the departed Donald Glover and Chevy Chase). Which means we do not–per Abed’s warning at the end of season 5–have to assume that the story ended because an asteroid destroyed human civilization.

Should it have, though? Season 5 was not the show’s best, despite a handful of inspired episodes–but assuming Harmon had a vision that needed an extra year to complete it, I’m happy to find out. Yeah, I’m ambivalent about the idea that every show with a passionate audience can and should be kept alive, even past its peak, by Netflix (which is bringing back The Killing), or Yahoo, or, I don’t know, is HotBot still around? Sometimes you need to know when to say goodbye. But even a bad season 6 of Community won’t negate the greatness of the show’s past–and it could get very interesting.

The closest comparison seems to be the revival of Arrested Development on Netflix. There too, you had a wildly imaginative show with an impassioned creator who had bumped up against the restrictions of network TV. The Netflix fourth season of Arrested Development was an entirely different beast from what aired on Fox, and in some ways it suggested that the show was better with network limitations; the time limits of commercial TV, for instance, forced the Fox version of the show to create a dense, rapid-fire language of comedy, and the Netflix version sometimes felt slack and oddly paced. But the new version was rewarding in its own ways, and to its credit, it attempted to become a new kind of show for the new format.

There’s still a lot we don’t know about the Yahoo version of Community, though early reports indicate that it will be produced more like a network show than a Netflix one: Vulture’s Joe Adalian reports that the show will likely release episodes weekly, not all at once (and that the budget will be in line with a network budget). Still, Community has been the story of Harmon’s attempt to make a sitcom be as many things as he could make it be: a cartoon, an 8-bit videogame, a pop-culture parody, and a bittersweet character story. Theoretically, a Community produced online could become even more: if Harmon needs ten minutes more (or less) for a given episode, why couldn’t he have it? If Mitch Hurwitz could create an elaborate, experimental intersecting narrative without network-TV constraints, I can only imagine what Harmon will do with that toolbox–though I also wonder how he’ll deal with not having those constraints to define himself against.

And no one should assume by now that a revived Community on Yahoo will be a lesser, cheaper Community. We’ve seen from Netflix, Hulu and Amazon (whose Transparent may be the fall show I’m most excited about) that online outlets can make TV that’s as impressive as anything on the slightly-bigger screen. Yahoo, meanwhile, should have every reason to invest in a version of Community it can be proud of. It’s been trying for a while to establish itself as a force in online video–see its hiring of Katie Couric as its global anchor. In any case, it seems fitting that Harmon, who co-founded the indie-TV/short-film website and festival Channel 101, should be part of online TV’s bid for the big time.

I’m happy for Harmon and crew that they’ve kept their show alive, but I also hope they think of this less as the sixth season of Community and more as the first season of something new. One thing’s for sure: now that the sixth season has been assured, I’m not betting against the movie, even if it has to be made entirely in Abed’s Imaginarium.

TIME streaming

Netflix’s Daredevil Finds a Best Friend

The 18th Annual IFP Independent Spirit Awards - Arrivals
Eldon Henson during The 18th Annual IFP Independent Spirit Awards J. Vespa--WireImage

Marvel casts Elden Henson as Franklin "Foggy" Nelson, rounding out the cast for the 13-episode superhero series heading to Netflix

Netflix’s Daredevil has found a best friend. Marvel announced Thursday that they had cast Elden Henson of Mighty Ducks fame in the role of Franklin “Foggy” Nelson, the best friend of Matt Murdock, a.k.a. Daredevil (played by Charlie Cox) for the series heading to Netflix next year.

“Elden plays one of the most important characters in the world of Marvel’s Daredevil, and we’re thrilled to see Foggy Nelson brought to life by such an incredibly talented actor,” Jeph Loeb, Marvel’s head of television, told The Hollywood Reporter in a statement. “He perfectly captures the heart and soul of this series, bringing an added resonance to Matt Murdock’s fight against the injustice in their great city.”

In addition to Cox and Henson, Marvel has also cast Rosario Dawson and Vincent D’Onofrio in the updated series about a New York City attorney who is blinded by radioactive substance that heightens his other senses.

Daredevil is one of five Marvel series headed to Netflix— along with Jessica Jones, Iron Fist and Luke Cage, as well as miniseries The Defenders — in what will be a massive partnership. Daredevil will be the first to debut, hitting the streaming service sometime in 2015.

[THR]

MONEY Shopping

Amazon Fire Phone Seem Too Pricey? Discounts Bound to Come Soon

Amazon Fire Smartphone with 3D map feature
An Amazon representative shows off the 3D map features of the company's new Fire smartphone at the company's campus in Seattle, Washington June 18, 2014. Jason Redmond—Reuters

If you think the brand-new Amazon phone is too darn expensive, sit tight. Discounts and promotions are bound to pop up within a few months, if not sooner.

Jeff Bezos unveiled the long-awaited Amazon Fire Phone on Wednesday, and the reaction in tech and consumer circles has been near universal: The phone has some very cool features, but at a price point starting at $199, with a two-year AT&T contract required, it simply costs too much to make a big impact on the smartphone market.

The “uninspired price tag is a surprising disappointment,” wrote the New York Times’ influential Farhad Manjoo, pronouncing the Amazon Fire phone a “missed opportunity.” It’s “Just Too Expensive,” a tech column Huffington Post headline declares bluntly.

Sure, the Amazon phone hasn’t even been released for sale yet, but that doesn’t mean it’s too early to start thinking about when it will be discounted. As anyone who follows the consumer electronics world in general—and smartphones and Amazon in particular—might guess, the Fire Phone is not likely to remain in the “too expensive” category forever. It’s not a matter of if but when the discounts and deals appear.

According to Louis Ramirez, senior editor at the deal-tracking site dealnews.com, the typical Android phone experiences a 50% price drop after two months on the market, and what “with better and cheaper Android phones being released every other month,” the pace of markdowns is on the rise. “The Galaxy 5S, for instance, saw multiple 50% discounts just one month after its release.”

Because this is Amazon’s first phone, and because AT&T is the exclusive provider, it’s not likely the phone will be discounted that aggressively in the near future, but experts foresee bundled deals and/or short-term promotional price drops fairly soon. “I think around the holidays is definitely a safe bet,” Sucharita Mulpuru-Kodali, a leading analyst in e-commerce for Forrester Research said via e-mail. (A note “Sent from my iPhone,” btw.)

Ramirez says that Amazon regularly hosts a “Penny Pincher” smartphone sale around Black Friday, when popular Android phones are sold for 1¢ when signing a two-year contract. “Now that they have their own phone,” Ramirez says of Amazon, “it’s very likely that phone will join their Black Friday sale. They may not cut it down to a penny, but you can expect it to see steep discounts come November.”

(MORE: Four Theories on What Amazon and Jeff Bezos Are Really Up To)

Forrester’s Mulpuru-Kodali agrees with the consensus take that the current Amazon Fire Phone price point is too high. But she stressed there was solid reasoning for why it wasn’t set cheaper. “That’s so they have room to bring the price down if units don’t move,” she said.

By putting an initial price on the Fire phone of $199 (with a two-year AT&T service plan) or $649 (with no contract), Amazon is also locking in the idea that this is how much the device is truly worth. The concept is called “price anchoring,” and it allows the seller to create the perception of an amazing, can’t-pass-up deal when the price is suddenly marked down. The J.C. Penneys and Kohl’s of the world make a regular habit of utilizing the tactic, in order to make their “sales” seem all the more impressive.

Smart consumers know to tune out these never-ending sales and just assume it’s unnecessary to buy anything at “full price.” Amazon generally doesn’t discount its devices left and right in this manner. On the other hand, Amazon doesn’t go the full Apple route either by offering discounts only on older gadgets—and only when a newer version is about to hit the market or has already been released. What Amazon tends to do instead is roll out deals here and there, somewhat randomly but regularly, so that consumers don’t think of the full price as a total joke, and so the discounts seem truly special.

(MORE: It Doesn’t Matter That Amazon’s Streaming Services Are Lame)

The folks at dealnews noted that the recently released Amazon Fire TV streaming device is likely to remain priced at $99 for quite some time, but that Amazon has already discounted it by including it in bundles packaged with an HDX tablet. They also say it’s all but guaranteed that the streaming device will be marked down during one or more holiday season promotions.

Complicating matters for Amazon is the fact that, as the (Jeff Bezos-owned) Washington Post pointed out, this is an especially difficult time to jump into the smartphone market. Pretty much everyone who wants a smartphone already has one—likely one that they’re pretty happy with too, after switching and upgrading a few times. While many of the Amazon Fire phone’s features are indeed cool, it’s unclear how many people will summarily dump their Apple or Samsung phones for a device from Amazon, a company that has had some glitches when launching new products, as Bezos mentioned during Wednesday’s unveiling. “I’m a little skeptical that what they’re bringing to the table is enough to make people put down their current phone and change to a new device,” Gartner analyst Tuong Nguyen told the Washington Post.

Of course, one way to encourage people to switch phones is a substantial discount on the purchase price. Such a discount won’t bother AT&T, which makes its money via monthly subscriber bills. And it may not be anathema to Amazon, which in the long run makes its money not by selling devices but by getting consumers to do more and more of their shopping on its site. That’s the purpose of services like Amazon Prime, of course.

It’s no coincidence that Prime is included for a year at no charge with Amazon Fire Phone purchases. “Think of the Amazon Fire as a Prime subscription-selling machine that also happens to make phone calls and send text messages,” New York magazine observed. The phone’s Firefly feature, which allows the owner to scan almost anything imaginable and soon be able to purchase it via Amazon, was also obviously created with the idea of boosting Amazon sales into the next stratosphere.

If the tradeoff for such sales increases is that Amazon has to sell its phone at cost or take a loss during promotional sales, that’s a trade Amazon can probably live with. Anyway, for consumers, the moral is: If you like shopping at Amazon and like Amazon’s new phone but think it’s too expensive, don’t preorder it, and don’t pull the trigger within the first couple weeks it’s officially for sale. Wait a bit, and you’re sure to be rewarded with a better deal.

MONEY online shopping

It Doesn’t Matter That Amazon’s Music Streaming Service Is Lame

listening to bad music
Monalyn Gracia—Corbis

Last week, Amazon introduced Prime Music, a streaming service included in a Prime subscription that scared … absolutely none of the big music streaming competitors.

Within hours of Amazon introducing its music streaming service, Prime Music, the consensus among critics and observers is that the service is … okay.

While Amazon played up the fact that Prime Music has “unlimited, ad-free streaming” and a catalogue of “over a million songs,” anyone and everyone evaluating the service was quick to point out that players in the streaming scene such as Spotify have well over 20 million songs. “It’s hard to tell who is the target audience for Amazon’s service. If it’s a consumer mass market play, there are still some big gaps,” TechCrunch observed, noting that 9 of the current top 10 in the Billboard Top 100 were not available last week via Prime Music streaming.

Businessweek called the service “half-baked,” declaring “there is little reason to believe that Prime Music will lure people away from Spotify or Rdio.” The tech columnist at USA Today agreed: “If you’re already a paying subscriber to Spotify, or huge fan of Pandora, nothing in Amazon’s new Prime Music offering, introduced Thursday, will make you want to switch.”

Prime Music’s reception in the marketplace bears an eerie resemblance to that of another streaming service, which also happens to be an Amazon product. Tech and entertainment writers have long argued that Amazon Prime’s streaming video options were no match to Netflix, which has a far more robust catalogue of TV shows and movies.

When Prime Instant Video was still new, critics bashed its “dismal lack of popular and recent titles.” Likewise, music critic Bob Lefsetz called Prime Music a “disaster” because, among other reasons, there are so many holes in the catalogue it’ll inevitably frustrate subscribers. “Now Bezos wants me to waste time, which nobody has any of, to click around and find the music I want to hear on his service, ultimately being disappointed in a fair share of my efforts?” Lefsetz wrote. “This is not a benefit, this is a DISTRACTION!”

Much of the Prime Music criticism is completely valid. But it probably doesn’t matter. Amazon customers are not only likely to see Prime Music as a benefit, but as the best kind of benefit, one that’s totally free, passed along by those generous benefactors in Seattle. Amazon Prime was born as a two-day delivery service—buy as much as you want on the site and get two-day shipping for $79 annually—and that’s what the average subscriber still thinks he’s paying for. All the extras, including video streaming, some free Kindle ebook rentals, and now, Prime Music, tend to be viewed as just that, as perks or extras.

It’s hard to complain about a service being somewhat subpar when the service being provided is free. Or at least when it feels like the service is free. Of course, you’re paying for the service, via your subscription fee—now $99, up from the original $79—plus all of those purchases you’re making at Amazon. But it still sorta feels free. For that matter, the “free” two-day shipping isn’t really free either; it’s more like a flat prepaid payment of $99 for a year’s worth of shipping.

By bulking up what’s included in the Amazon Prime service package, Amazon is using a tactic out of the storied cable TV bundle playbook. The average pay TV subscriber watches only around 17 channels, yet his package includes 100, 200, perhaps 700 more options. Paying $90 per month for a mere 17 channels sounds like a lot. But when that $90 gives the customer a bundle of 600 channels, it feels like a much better value—even if you never watch 573 of them. Similarly, Amazon Prime members are likely to feel like they’re getting good value for their Prime bundle, even if they rarely or never take advantage of the streaming options and other extras.

Just knowing that these extras are part of the package helps convince some consumers that a Prime membership is worthwhile. And if they actually use those streaming options for hours and hours, week in, week out? That works out well for Amazon too, because the more time spent on the site, the more likely a subscriber is to be tempted into making purchases. And the more likely a subscriber is to feel that an Amazon Prime membership is an absolute essential. Subscribers will only head more in that direction as Prime Music adds to its song list, which is sure to happen in the same way that Prime Instant Video has expanded its catalogue, adding HBO shows like “The Sopranos” in April.

And hey, remember, it’s all free for Prime subscribers!

MONEY Sports

Your Guide to Watching World Cup Soccer—Legally, for the Most Part

There are more ways than ever to tune in to the World Cup, held this year in Brazil. Here are all the options.

+ READ ARTICLE

The World Cup starts on Thursday, and if you’re like pretty much everyone in the world (the 2010 Cup drew an audience of 3.2 billion), you’re looking for ways to watch this event at home, at work, on the train, maybe in the shower. Here are all the legal methods — plus a couple ambiguously legal ones — to get your soccer football fix.

Regular Old Television

If you own a TV (or can sneak one into your office), you automatically have access to the 10 matches that will air on ABC. Have cable or a satellite TV package? Then you can watch the other 54 matches exclusive to ESPN and ESPN 2. Here’s a TV schedule to help you keep track of all the channels. As you might guess, the first two scheduled matches for the United States team, on Monday, June 16 (versus Ghana) and Sunday, June 22 (versus Portugal) are being shown on ESPN, not ABC.

Streaming Via ESPN

TV? What is this, 2010? Nowadays it’s all about watching everything on your computer, smartphone, or tablet, and ESPN has delivered with the relaunched ESPN FC. The website is a soccer news and video hub that sports both a website and a downloadable app for your mobile devices. During the World Cup, ESPN FC will be airing all of ESPN and parent company ABC’s World Cup coverage. That means you can watch all 64 matches online as well (assuming your cable provider is on this list). The problem? Just like with NBC’s online streaming of the Winter Olympics, you need a cable or satellite subscription to access any of the content.

Stream Directly From Your TV

Want to watch at work, but don’t have a TV at your desk? Devices like Slingbox let you stream direct from your home TV and then watch on the Slingbox website or app. It also offers a 1080p viewing experience in case ESPN’s quality dips. You can stream anything you could normally watch on your home TV, meaning no ESPN unless you pay for cable or satellite. However, Slingbox can stream ABC matches from your TV if you own a digital TV tuner (which comes included in certain Slingbox models).

Try Aereo (Before the Supreme Court Bans It)

Aereo is a service that has planted thousands of tiny TV antennas all around the U.S. and then streams that content to a subscriber’s computer or mobile device. (This creative method of skirting copyright law has led to a bit of legal trouble.) Because it largely depends on what it can pick up off the air, Aereo’s content essentially consists of the major networks. Luckily for you, that means all 10 matches being shown on ABC. (Unlucky for you, no matches featuring Team USA, at least not in the beginning.) The best part? The company is offering a 30-day free trial (after that, it will cost $8 a month). Just make sure you live in one of its coverage areas.

Stream for Free … in Spanish

Spanish language channel Univision is streaming every single match from the first two rounds for free, without requiring the viewer to be a cable or satellite pay TV subscriber. Even better, the company offers an Android and iOS app in addition to its website. The catch? Well, obviously, broadcasts are in Spanish. If you speak the language, this is muy bueno, and if you don’t, you can listen to EPSN radio with the match on mute. Consider giving the original broadcast a chance, though. Spanish announcing is always better. Gooooooool!

Cross the border

As for the more… creative methods for World Cup viewing, many U.S.-based soccer fans head across the border — virtually. Canada’s CBC, the U.K.’s BBC, Ireland’s RTE and Australia’s SBS are all streaming everything for free—but only to people who live in their respective home countries. To get around the regional lock, hard-core fans use services like TunnelBear that create a virtual private network, masking one’s true location.

Is it legal? Accessing content from outside these networks’ region is a clear violation of their terms of service; but whether users are actually breaking the law is apparently a grey area. “While there are differences among the courts about the use of masking IP addresses to gain access to a site,” Electronic Frontier Foundation staff attorney Mitch Stoltz told Forbes, “it is pretty well established that simply violating the Terms of Service alone is not sufficient to warrant a violation of the Computer Fraud and Abuse Act.”

Stoltz admits that authorities might go after a TunnelBear user as an example to others, but says such an outcome is “very unlikely.” For its part, TunnelBear emphasizes that it is based in Canada, outside U.S. jurisdiction, and that there is “no Canadian law that requires us to keep logs on customer usage.”

TIME Television

Netflix Orders Reboot of The Magic School Bus

Scholastic Media

After the '90s kids science education series found renewed popularity on Netflix, the streaming service decided to order an all-new, rebooted series

Good news, ’90s nostalgists: The New York Times reports that Netflix is ordering a reboot of The Magic School Bus.

Called The Magic School Bus 360°, the new series will be a reboot of the popular ’90s children’s cartoon from Scholastic Media that originally from 1994 until 1997. The show — which was based on the science education book series of the same name — featured a group of children and their teacher, Ms. Frizzle (voiced by Lily Tomlin), who go on magical school field trips to places like outer space or inside the human digestive system.

Apparently the original series is still a fan favorite on Netflix. [T]he old version, is remarkably popular on Netflix,” the company’s chief content officer, Ted Sarandos, told the Times, adding that the program was their top educational show. “It teaches science in a way that transcends generations.”

With 26 half-hour episodes available for worldwide streaming sometime in 2016, the new series will use CGI animation. Other new features will include an updated Ms. Frizzle, an updated bus and modern scientific tools, such as robots. No word yet on who will sing the new theme tune — Little Richard performed the original — but our expectations are high.

[NYT]

TIME Media

Verizon Threatens Legal Action Over Netflix Streaming Message

What was a minor skirmish between Verizon and Netflix looks set to become a full-blown battle after Verizon sent Netflix a cease-and-desist letter Thursday demanding that Netflix stop blaming Verizon for slow streaming speeds.

“There is no basis for Netflix to assert that issues with respect to playback of any particular video session are attributable solely to the Verizon network,” the letter reads. “As Netflix knows, there are many different factors that can affect traffic on the Internet.”

In the letter, Verizon also demands that Netflix tell it the names of every customer who saw the message, along with proof that Verizon’s network was to blame for slow speeds, within five days.

“Failure to provide this information may lead us to pursue legal remedies, and Verizon reserves all rights in that regard,” Verizon’s letter reads.

Netflix spokesperson Joris Evers confirmed in an e-mail to TIME that the company received Verizon’s letter. Evers did not back down from Netflix’s previous stance, which is that the message blaming Verizon was a way to “keep [Netflix] members informed” and that they might use such wording to describe other ISPs as well.

“This is about consumers not getting what they paid for from their broadband provider,” Evers told TIME. “We are trying to provide more transparency, just like we do with [our] ISP Speed Index, and Verizon is trying to shut down that discussion.”

The conflict between the two tech giants erupted Wednesday after a Vox Media journalist tweeted an image of his Netflix buffering screen that read “the Verizon network is crowded right now.” The sentence explicitly placed the blame on Verizon for slow streaming, a claim that could be damaging to Verizon’s brand, according to Verizon’s cease-and-desist letter.

Netflix is locked in a fight with several major Internet Service Providers over who should pay to deliver video content into people’s homes. Netflix — and certain niche ISPs, like Google Fiber — believe content should be delivered across the so-called last mile of the broadband network into people’s homes for free. Verizon, Comcast and AT&T believe Netflix and other content providers should have to pay a fee to establish a direct connection to their networks and stream video into customers’ homes. Otherwise, they say, all of their subscribers will have to bear the cost of serving content that only serves Netflix customers.

Though Netflix has tried to conflate such tolls with the ongoing debate about net neutrality, it has agreed to paid peering agreements with both Verizon and Comcast to establish a direct connection to their networks and boost customers’ streaming speeds.

Letter to David Hyman by VictorLuckerson

Read Verizon’s letter to Netflix in full above.

TIME Media

Netflix Will Have to Spend a Fortune for Its International Expansion

Netflix
Justin Sullivan--Getty Images

Netflix is displaying Frank Underwood levels of ambition with its latest announcement. The streaming service is planning to expand to six new European countries later this year: Germany, Austria, Switzerland, France, Belgium and Luxembourg.

With 36 million U.S. subscribers and 13 million internationally, Netflix has the most room for growth abroad. The company has an estimated 1.5 million subscribers in the UK and is available in more than 40 countries total. France and Germany will be two of the largest markets that Netflix has entered so far.

The expansion will put a hurt on Netflix’s balance sheet, though. The company’s international division has always been a money pit—it lost $274 million on operations abroad in 2013 alone. Not only does Netflix have to provide technical and customer support across a wide variety of languages, but it also must negotiate streaming rights for programming for each individual country.

That may help explain why Netflix spent about $19.30 per user internationally in the first quarter of 2014, compared to just $14.50 per user in the U.S. In its last earnings report, Netflix said that its current international operations will be profitable by the end of the year, but Chief Financial Officer David Wells said upcoming expansions will be just as pricey as previous ones.

Netflix believes it is spending now to profit later. CEO Reed Hastings has said that international customers will eventually generate 70 to 80 percent of Netflix’s revenue. That’s why company is now creating content specifically tailored to this audience, such as an upcoming show about a family that owns a soccer club that will be in Spanish.

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