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Netflix's global domination plans find a US fanbase

The streaming service is finding that shows produced abroad catch on at home. It's one of the surprising nuggets that helped fuel a strong fourth quarter.


A scene from "3%," a Brazilian sci-fi series from Netflix that's gained a US audience.


Are US customers interested in watching a post-apocalyptic thriller in Portuguese? Apparently, yes.

Netflix said its series "3%," which was made for Brazil, unexpectedly had legs outside that market, with millions of US viewers tuning in to watch the show, subtitles (or dubbed) and all.

The series offered an early example of how Netflix's international expansion can sometimes pay dividends back home. While investors are eyeing the progress of Netflix's global rollout, much of the programming its producing for those foreign markets are finding their way into your living room.

"We're seeing as we're adding more and more global shows that it's rising all boats across the world," Ted Sarandos, Netflix's chief content officer, said during an interview with analysts Wednesday.

He added that the strength of US shows, including "Narcos" and "Gilmore Girls," were also helping attract more international customers.

That fact was highlighted by the company's better-than-expected quarterly earnings, which were released Wednesday. Netflix added 7 million more members in the fourth quarter, marking the largest period of net additions in the company's history, reaching a total of 94 million global members. That increase was helped especially by a big rise in international customers, although the company also topped its forecast in the US.

The goal moving forward, the company said, is to keep creating shows that can translate across borders, such as Japanese anime and Turkish dramas. There's no guarantee this effort will work. Exhibit A: Netflix's high-budget, globe-trotting series "Marco Polo" was a flop.

"There remains a lot to learn to make Netflix as popular abroad as it is in the US," the company said in an investor letter Wednesday.

Netflix early last year expanded to 130 new countries, making it an international streaming-video service in just about every country except China. The international market is helping Netflix maintain its fast growth, despite already going mainstream in the US.

For the fourth quarter, Netflix reported a profit of $67 million, or 15 cents a share, and revenue of $2.35 billion, with both figures beating the company's guidance. While earnings topped Wall Street's forecast, it fell shy of the revenue forecast of $2.47 billion, according to Yahoo Finance.

Investors were more impressed with the subscriber growth. Netflix's stock rose 8.1 percent to $144.10 in after-hours trading.

Netflix also offered a statement in support of net neutrality, or the equal treatment of all traffic that runs across the internet, which is similar to the company's previous statements. Wednesday's comments are noteworthy because they come two days before Donald Trump takes the oath to become president. He is widely expected to appoint officials to the Federal Communications Commission who will dismantle the net neutrality rules set in place in 2015.

While Netflix managed to end the year on a high note, the competition keeps proliferating. Netflix nodded to this reality by mentioning in its letter that Amazon's streaming video expanded internationally, while people are watching more videos on Facebook and Apple is rumored to be pushing into video.

"It's becoming an internet TV world," the company said in the letter, "which presents both challenges and opportunities for Netflix as we strive to earn screen time."

Finding ways to bring in more customers -- with the help of a Brazilian sci-fi flick or two -- will be critical for Netflix to stay a step ahead of the competition.