Netflix’s recent announcement of their international expansion in 2016 is not unexpected, but still somewhat breathtaking in its scope. While it may seem natural to those in the United States, where Netflix holds a dominant position in the Subscription Video on Demand (SVOD) space and in other early markets where it is a well-known brand, but this latest overseas growth is not as much “a sure thing” elsewhere.
Certainly Netflix will enter these new markets with a well-known brand name, which may be less connected to its actual content than to the fact that US-originating digital brands often have a leg-up on local brands. Netflix will generally appeal to affluent, Western-oriented consumers outside of the North American and Western European markets.
But Netflix will have a number of concerns when entering these other developing markets that make up much of the dozens being added. These include:
That being said, Netflix has consistently outperformed expectations of industry experts and those in the financial markets. Its daring moves in the past have mostly panned out. And, aside from content, it has an understanding of its consumers – through the use of its own collected big data – with which few of its potential competitors can hope to compare.
As for its competitors, frenemies, and partners - some being all three - the growth of Netflix raises questions that only third-party accounting of Netflix can answer. This way their competition or partnership with Netflix is on a more level playing field.
What do you think about Netflix’s expansion? Do you see other challenges? I would like to hear your opinion as well.
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