Netflix planning for global expansion

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For anyone out there who can’t last a day without watching an episode (or five) of their current Netflix obsession, it might seem hard to believe that most of the world lives without this movie lovers’ website.

But hopefully it won’t be this way for long as the company plans to introduce its’ services to a number of international markets over the next two years.

The popular video streaming server has experienced substantial growth over the last year. In 2014, Netflix gained 13 million new subscribers worldwide, bringing in $83.4 billion dollars. In the last quarter alone, Netflix acquired 4.3 million users. Netflix hopes to increase its’ international users, as approximately three quarters of the business’s users are from the United States. Currently, Netflix has 57 million users altogether across 50 countries. The company’s success in existing markets has encouraged rapid expansion globally- just this past week Netflix was launched in Cuba.

The company’s move to Cuba is part of Netflix’s long term goal to expand its’ business worldwide. According to CEO, Reed Hastings, the company is continually growing and by 2017 it is projected to offer services in 200 countries across the globe.

Hastings believes that he could be reaching a larger audience. In a phone interview for the New York Times, Hastings claimed: “Ninety-five percent of people who live on the planet live outside the United States, and generally for global internet business about eighty percent of the usage is outside the U.S.” Furthermore, “We want to bring our services to as many nations as possible.”

Since Netflix began in 1997, services have become available in various countries over time. In 2010, Netflix was introduced in Canada. In 2011 it came to countries throughout Latin America and the Caribbean. In 2012, it became available in the United Kingdom.

More recently, the company has really focused on accelerating their global expansion process to reach their goal by 2017. In 2014 alone, Netflix became available in six countries – Austria, Belgium, France, Germany, Luxembourg, and Switzerland. By becoming available throughout Europe, Netflix has widened their target market with over 66 million potential customers in this area.

In order to meet its’ goals, Netflix will have to continue making its’ services available at a fast pace – on average the company will have to launch in six new markets per month.

While expansion has taken place, the company faces a number of challenges. Feedback from European countries suggest that many are dissatisfied with quality of services offered in their countries. There have been many complaints that the content offered in Europe was much less than what is available in the United States. Netflixable.com reports that the United States has more than 8,500 movies and television series available to its users, compared to a mere 3,100 in the United Kingdom, and 2,000 elsewhere in Europe.

Also, Netflix has been experiencing difficulty obtaining content rights in these new markets. In some locations, for example, Netflix does not own the rights to its’ original series “House of Cards”.

The lack of content available through Netflix has left many to stream movies and videos using other sites. Some international viewers have begun accessing the American Netflix through Virtual Private Networks (VPNs). British research firm GlobalWebIndex believes that monthly, 34 million people are accessing Netflix from a VPN in a region where Netflix is already available.

In addition to lack of content, Netflix has had difficulty overcoming cultural barriers as the company has to familiarize itself with each new location to effectively market its’ services. Netflix does have plans to better cater to each individual market as the company continues to expand. One such idea is adding the French crime drama “Marseille” to the selections available.

Netflix has many plans that have already taken place as the company works towards its’ goal to become a globally known brand.

 

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