Netflix wants to be global
The online video-streaming giant Netflix is scheduled to report second-quarter earnings after the bell on Wednesday.
Netflix forecasts that it will gain some 26 million international subscribers in 50 countries by the end of this year, and hopes to operate around the world by the end of 2016.
“The main thing for them at this stage is just the raw subscriber growth numbers,” says Jim Nail, a business-to-consumer analyst at Forrester Research.
The biggest prize for Netflix would be China, where the e-commerce company Alibaba recently launched its own streaming service.
“But I don’t think it’s a deal killer,” Nail says. “I think that it certainly sets up steeper competition, which is the future of Neflix.”
Domestically, Netflix aims to drive subscriptions by continuing to produce its own content with shows such as “Orange Is the New Black” or “House of Cards.”
That programming is really expensive, University of Michigan communications professor Amanda Lotz says. “Netflix is spending a lot of money, and so that’s the pressure to expand subscribers in order to amortize those costs over a bigger subscriber base.”
The big threat to Netflix going forward, Lotz says, could be when all those content providers decide to simply bypass the middleman. “What happens once other studios stop selling their content to Netflix and choose to distribute it themselves?”
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