Commentary

Netflix Foreign Subs Will Beat U.S. By 2018, Report Says

A new report from London-based IHS Markit predicts that by 2018, Netflix’s foreign subscribers will outnumber its U.S. base, and that overall that year, Netflix will claim 100 million paying customers.

According to IHS, Netflix now has 79.9 million total subscribers, a figure lower than the 83 million Netflix itself reported in July.

Right now, Netflix claims to have 34 million international subscribers, which mean IHS expects foreign subscribers to more than double in the next four years. That would seem to be more optimistic than Netflix growth has been recently.

In the second quarter, Netflix added 1.5 million subscribers outside the U.S. not quite hitting the 2 million adds that had been predicted.

“We are growing, but not as fast as we would have liked or have been” Netflix chief Reed Hastings wrote to shareholders. Netflix has also seemed to have hit a wall in the U.S. It added just 150,000 net subs domestically  in the second quarter, which Netflix attributed to a much delayed subscription price increase for long-time subscribers. 

advertisement

advertisement

CNBC reported that Netflix hopes to add 2 million subscribers overseas in the third quarter, an adjustment, downward, from the 2.85 million once projected.

The IHS report says, “At the end of 2016, unsurprisingly, Western Europe, with strong UK (over 6 million subscribers by the end of 2016), Netherlands and Nordic (5.4 million subscribers combined) markets, will be the leading region for Netflix outside the domestic US subscriber base, the report said. Germany, despite strong competition from Amazon Prime and free TV, is expected to reach 2.2 million paying subscribers by the end of 2020.”

IHS says that in Poland and Turkey, efforts to coordinate its offerings and language to fit the population “will drive further uptake.” 

Irina Kornilova, IHS  senior analyst, said, “Subscribers in these countries can expect an addition of local languages to the user interface, subtitles and dubbing of content. This will help drive new subscriber numbers dramatically.” It’s a common sense strategy Netflix hopes to use in other nations around the world.

Netflix itself says its plan is to break even, financially, by the end of the year in foreign markets, and build “material profits”  going forward.  The possible gains IHS sees could happen. Netflix expanded to add 130 nations at the beginning of 2016, meaning Netflix is available virtually around the world, except in Syria, North Korea and Crimea, and with the huge exception of China.

pj@mediapost.com
Next story loading loading..