Netflix, Inc. (NASDAQ:NFLX) will be grabbing its passport. A new report suggests that the online streaming giant’s global initiative is actually paying dividends. In the next two years, a majority of the website’s subscribers will be international. The company’s global subscriber base will actually outpace U.S. subscribers by the year 2018. That’s big news for its global expansion efforts.
Netflix, Inc. Goes Global as Foreign Users to Top U.S. Users
Netflix CEO may have his goal of taking over the world achieved.
According to a new report by IHS Markit, a data analytics firm, the streaming service’s total user count will be dominated by international users. By 2018, there will be more foreign users than domestic.
In two years, for the very first time, international subscribers will outpace American subscribers. By the year 2020, Netflix will have roughly 75 million international users. In that same year, its global revenues will exceed $13 billion, with more than half (53 percent) of that coming from international markets. The U.S. streaming market will generate $6.2 billion in revenues.
Over the last couple of years, Netflix has been rolling out its service in foreign markets. Since domestic subscriptions have become sluggish in the last several quarters, Netflix had no other alternative but to stream in nearly 200 countries. The slow growth in the U.S. has had investors very worried.
The company has even produced foreign original shows that have garnered acclaim to boost numbers.
“Netflix has launched a platform upon which it can build and differentiate the service to fit specifics of every region in the future,” IHS analyst Irina Korilova said in a statement. “Netflix is starting this localization process in Poland and Turkey this year. Subscribers in these countries can expect an addition of local languages on the user interface, subtitles and dubbing of content. This will help drive new subscriber numbers drastically.”
But what about China? Will Netflix unlock that potentially lucrative market? They’re trying very hard. China has a very regulated market and its barriers are tough to overcome so it could take longer to make a presence in Beijing, Shanghai and Shenzhen.
Other Findings From Report Could Boost Netflix, Inc.
IHS Markit revealed some other key findings from its report that could benefit Netflix moving forward.
The report discovered that digital services like Netflix are prompting consumers to transition away from live television programming. In fact, the amount of traditional TV U.S. adults are consuming has averaged 18 minutes fewer per day compared to two years ago. At the same time, TV ad revenue has stalled and cable subscriptions has dropped.
Millennials – those born between 1980 and 2000 – are the biggest adopters of digital services like Netflix. This is important news because they will be long-term subscribers of Netflix or Amazon.com, Inc. (NASDAQ:AMZN) Prime Video. Millennial consumers will keep pouring money into Netflix.
We are also imbibing more media content than ever before. More than half of U.S. TV households subscribe to SVOD services akin to Netflix and Amazon. The amount of original digital video content we view goes up every single year.
As more and more consumers adopt digital video technology and shift away from live TV, the report notes that there will be new technologies coming to measure what and how we watch. Perhaps the conventional Nielsen ratings will become obsolete in the future.
In any event, Netflix is winning big time, and could be here to stay. In other words, Netflix is still the cool kid across global market, eh Mike Fries?