Can Netflix Expand Its Dominance To International Markets

Some people see Netflix as an HBO, Comcast or Lions Gate; in other words traditional entertainment. Others view Netflix as an Uber, WhatsApp, Airbnb or Facebook; an extremely disruptive business that has surpassed all imagination. Categorizing Netflix in the proper camp helps in understanding the total addressable market. Netflix is like WhatsApp in the early days, thus predicting subscriber growth in five years based on historical data is irrational at best. According to a Fortune article, analyst expect Netflix to reach 100M subscribers by 2020.

Sure, Netflix can reach 100M subscribers by 2020, but it’s also possible Netflix can reach 300M subscribers in the same period. After all, the global population is 7.3B, with BRIC nations representing 3B. From 2005 to 2010, worldwide internet user growth doubled from 1B to 2B. From 2010 to 2015, internet users grew from 2B to 3.1B. Is it safe to say that Internet user growth will surpass 4B by 2020? With so many people connected online, sky’s the limit for Netflix. A better way to measure subscriber growth is to take the original estimate, multiply it by three, then equate it to a range like 100M to 300M.

Most Spoken Languages – Population Netflix Investment in Original Content
Chinese – 1.19B $350M
Spanish – 414M $500M
English – 335M N/A
Hindi – 260M $350M
Arabic – 237M $200M
Portuguese – 203M $100M

How can Netflix reach 200M+ subscribers by 2020? The answer is much simpler than it seems. Netflix needs to figure out the equation for growing the international market. China is top of mind for Netflix; whether it happens or not is another question. Thus, Netflix can start investing in international markets, by developing original content for a specific demographic. For example, Chinese develop content for the Chinese, Spanish for the Spanish, French for the French, and so on.

In fact, Netflix can use that same formula for the five major non-English speaking demographics listed above in the matrix. The key is new content development. I’m sure those local economies would welcome the investment, and Netflix can invest in becoming a truly dominant multi-language OTT platform of the ages.

Digiprove sealCopyright secured by Digiprove © 2015