27
Jan

Netflix to achieve world domination by 2017

Leave a Comment  /  Posted in Blog Post, Content Deals, International expansion, Ted Sarandos

It has been four years and change since Netflix launched in its first international market — Canada — with much fanfare and a minor but embarrassing episode involving paid extras who were sprinkled into the crowd at a company-sponsored street party in Toronto. Then came the 2011 Latin American barnstorm-style rollout — Netflix’s most complicated — in which it confronted issues with weak broadband penetration, fewer digital devices, language and credit card processing issues. Great Britain and Ireland followed — with much jockeying from established competitors. Last year’s European launches looked like a snap and those markets, according to the company, been a bigger-than-expected success. And we learned last week that Netflix is fixin’ to take over the world. In two years.

Netflix’s fourth quarter earnings presentation contained the startling statement that the company can complete its international expansion– while staying profitable — in two years. That means growing from about 50 international markets to 200. And even more delightfully, it means that Content Chief Ted Sarandos soon will have the might to negotiate global content deals that enrich selection — opening new worlds of international content to U.S. subscribers and creating a new reality in which Netflix subscribers around the world are watching the same “channel.” Imagine the water cooler talk.

The company’s discovery that its original content – Marco Polo, Orange Is the New Black, House of Cards — performs more efficiently than the stuff it licenses has led to its decision to triple its spending on originals, from 100 hours in 2014 to 320 hours this year. This lovely explosion of films, documentaries, original series and comedy specials presumably will further minimize the importance of “windowing” — distribution deals that cause TV shows and movies to hopscotch aggravatingly across pay-per-view and broadcast services.

Here’s the relevant information from the earnings presentation.

 

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