Monday, October 17, 2016

Netflix Reports Surge in New Domestic and International Members

Article by:  Maria Armental and Shalini Ramachandran
Blogpost by: Deema Alrasheed

http://www.wsj.com/articles/netflix-reports-surge-in-new-members-1476735355

In July, Netflix Inc. reported its weakest subscriber expansion in three years, as the company suffered a sharp slowdown in net customer additions in the U.S. and abroad. Netflix only added 160,000 subscribers in the U.S. and 1.52 million in international markets, below expectations of 500,000 in the U.S. and 2 million abroad. But in September, the streaming-video service added 3.57 million new members. Shares of Netflix also surged 20% to $119.40 in after-hours trading. 

Netflix adopted a couple of strategies that are important when targeting international markets. One of the strategies that helped Netflix's international success is the fact that the company accepts payments in local currencies and offers international languages options for streaming its content. This aided in boosting its subscribers in countries such as Turkey and Poland. Another factor that helped Netflix's gain in subscribers is the popular show "Narcos."


Netflix shows that adapting to international audiences' wants and tastes are as important as meeting domestic customers' demands.

Netflix also claimed that it is going to explore opportunities to license its shows to other online players in China, as a way to further build its brand. Partnerships and trust are very important when doing business internationally, and the company foresees that the revenue contribution from China will be "modest." But the company still hopes to serve countries such as China, North Korea, and Syria where Netflix still does not operate. Because the regulatory environment for foreign digital content services in China is challenging, Netflix plans to license content to existing online service providers in China rather than operate their own service in the country.

Overall, Netflix reported a profit of $51.5 million, or 12 cents per share, which is an increase from last year's $29.4 million, or 7 cents per share. 

2 comments:

  1. If only Netflix can wiggle its way through the Chinese regulatory system to gain access to such a large market.

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  2. Netflix has a great capability of adaptation to international markets with different content and features for each country, and also meeting the regulations of the countries; in my opinion that is the most important factor to its success all around the world, despite sometimes the contents are not the most popular or good enough. In the case of the Chinese market, Netflix could start streaming local content to be recognized as an online service provider, and once established in the country, dealing with regulations to include its own content.

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