Netflix’s Performance In Various Regions

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The streaming media service provider, with its expansion spree has managed to gain a lot of popularity in some of the major countries of the world however in a few regions, it will need to try a little harder to attract the right audience.

According to a report, over 1.4 million households subscribed for Netflix Inc.’s service in 2015 in United Kingdom while nearly a quarter of households in the region are subscribed to the service now. In the last few months 2015, over more than 5 million households subscribed for the service while in 2014 over 14% of the total so.

In comparison to its competitors, Amazon Prime and Sky, the streaming media giant is doing incredibly well in the area; furthermore it is continuing to grow at a faster pace than all the other video streaming services in the region. As per the data, over 1.4 million households in UK have Amazon Prime, on the other hand, over 1 million have subscribed for Sky TV’s service. This data has been based on a survey conducted by UK’s Broadcasters’ Audience Research Board (Barb). It stated that Netflix is ahead in compared to other services by a significant margin and it is growing more than all the other service providers.

The report further suggested that the customers who are subscribed to either Netflix or Amazon are likely to be subscribed to traditional television services as well from various cable TV providers including Sky, Virgin Media and BT.

On the contrary, the video streaming leader had announced earlier this year that will be make its service available in all the major countries of the world except for China. It has managed to conquer most of Asia Pacific however gaining popularity in these regions will not be as easy as it seems to be. The major obstacles that are in the way could be the region’s size, different regulations that are followed in those regions, language barrier (language based content) and also competition that it will receive from local service providers.

The first problem to be taken into consideration is the language barrier; in most of these regions people have subscribed to traditional cable service where they get to access content of their language. However, in Netflix’s case, it needs to work on content for all these regions where it is providing its service in order to gain the popularity that it has received in the United States and Europe.

Local content is what majorly matter when entering a new region and can prove to be a huge hindrance in the way of success. Some of the regions that the company had targeted, that might have a language barrier issue are South Korea and Hong Kong as the audience in these specific regions prefer to watch content in their language.

Jonathan Friedland, the chief communication officer told Bloomberg that the on-demand subscription provider’s content does well in the United States but in other countries great TV is being made. Since that is the market that Netflix has decided to target, it will need to produce content that appeal to that audience as well which means spending millions of dollars again.

However, the company stated that due to its expansion spree last year, the company gained a humongous subscriber base.



Time To Buy Netflix Stock!

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The streaming media giant was on a roll last year but its safe to say that it has slowed down a bit as the stock price has declined significantly since the beginning of the year.

In two months’ time, Netflix stock has fallen by as much as 30% after hitting its all-time high earlier in December at $133.27. For the first time ever since the stock split in July, the stock of the streaming media giant was reported to be below the $90 mark. It is safe to say that this is a good opportunity for people to buy the stock of the streaming media as it has still been reporting growth in in its subscriber base.

On the other hand, one of the major brokerage firms stated that the stock of the video streaming media corporation could go up by as much as 40%. NFLX stock has been given a rating of ‘Overweight’ from an initial rating of ‘Neutral’ by the analysts at the research and financial services firm Piper Jaffray. The price target suggest by the stock experts of the research firm was $122.00 per share.

This rating was entirely based on the fact that the potential subscriber growth of the streaming media company is likely to rise in recent time. The analysts believe that by the end of 2020, which is four years away, the user base could reach to as much as 142 million online video on demand subscribers all across the globe. The breakdown of this number suggests that over 62.5 million users will be from the United States alone while the rest will be from all across the world.

On January 1, 2016, the user base of the media house had reached to 75 million; during the previous year the corporation added as many as 17 million throughout the year while for the current quarter it is expecting to add at least six million new subscribers.

However, the starting of the New Year had not been quite fair with the success of the business as the shares are down by 25.4% while the investors and shareholders of Netflix believe this to be a good sign. Despite the fact that it announced earlier in January that the service has been made available in over 130 countries simultaneously which brought it closer to its target of being in 200 countries by the end of 2016.

The strong international growth/ expansion as well as the growing user base did not stop the stock of the giant to slide. Netflix Inc. was the top performer of S&P 500 during the previous year. It is working on further growth for the current quarter of fiscal year 2016 and expecting to do even better than it did in the previous year.

Presently, the stock is being traded in the market for a share price of $83.32 indicating an increase of 0.64%. During the previous trading session the stock was seen hit a high point of $84.70 with a lower end of $79.95. However, the 52-week high of Netflix was reported to be $133.27 and the one year low was reported to be $58.46. The streaming media giant’s market capitalization is $32.92 billion with earnings per share of $0.28 and price to earnings ratio of $296.73.

Netflix will spend $5 billion on content in 2016

Netflix will spend $5 billion on content in 2016

Netflix Inc. is ready to invest $5 billion on its content

According to news, Netflix Inc. is all set to invest a massive $5 billion on its content. To be precise, the streaming giant will be ‘doubling down’ on its original programming and production from the next year in order to be more inclined towards their objective of original content production. However it is to be believed that the company would still not be capturing the full scope of its programming objectives. The main objective is to be the dominant force in the original content and production domain but for now the company is only increase the portfolio of its original productions.

Next year, the company will push further to create and improve content by investing $5 billion. This investment will cover all the licensing costs of online movies and TV shows as well as the original content production. The company spent only $2 billion on content in 2013. This shows how determined Netflix is to dominate the original content space.

Netflix is spending almost everything it has on its content in order to improve the quality and focus of its content. The streaming service giant recently is well known for a few popular programs such as Narcos and House of Cards and the content does tell the difference between itself and its rivals Hulu and Amazon Prime. A source suggests, “a renewed focus on original content is precisely why Netflix had absolutely no qualms about letting its movie deal with Epix expire, losing thousands of films in the process, including popular titles like The Hunger Games: Catching Fire.”

Furthermore, analysts and professional believe that the company will have over 10 series more of its own than the powerhouses of the industry such as HBO and FX/FXX starting 2016 onwards. Netflix is expected to be flooding the market soon with its own original content.

According to Josef Adalian who wrote in Vulture regarding the company’s content, “[The] rapid rise of Netflix as a source of original programming is breathtaking — and without recent historical precedent. FX and HBO, for example, had been in business for one and two decades, respectively, before they began seriously expanding their scripted offerings — and then did so at a much more measured pace than Netflix.”

Netflix is the only company apart from ESPN to be spending such a hefty amount on media content and programming in 2016. Therefore, its original content costs in the coming times will be way more than that of HBO, Amazon, and Showtime combined.