Netflix’s competitive landscape
Early this year, Netflix (NFLX) expanded to 130 countries around the world. Last year, Netflix (NFLX) said at the UBS (UBS) Global Media and Communications Conference that it had crossed 2 million subscribers in Germany (EWG) and France (EWQ). Netflix has proved to be extremely popular in those countries. Eight of the top ten shows there are Netflix originals.
However, the company is facing increasing competition in international territories. Netflix said at the Goldman Sachs Communacopia conference last month that in various international markets, it’s facing a variety of competitors, including strong linear pay-TV operators such as Sky. In some countries, it’s facing the problem of low pay-TV penetration. However, the company admitted that in such countries, the Internet is fueling the growth of streaming services.
According to a 2014 IHS (IHS) Technology Report, Netflix is expected to add 8.0 million European subscribers by the end of 2018. The same report also stated that the growth in the Western European SVOD (subscription video on demand) market is expected to see an annual average growth rate of 35.0% from 2014–2018, mainly propelled by Netflix.
Reason for the popularity
The main reason for Netflix’s popularity in European countries such as Germany and France has been a mix of the company’s original English language programming and local content. Its English language original shows such as Narcos and Daredevil are proving to be extremely popular in European countries.
This strategy has helped Netflix compete against peers such as Amazon’s Prime Instant Video service (AMZN) in Germany.