Netflix is continuing its European expansion, announcing that it will be bringing its streaming service to Germany, Austria, Switzerland, France, Belgium and Luxembourg later this year. Once launched, new Netflix users in these countries will have instant access to Netflix’s library of Hollywood fare, as well as local and global television series and movies.
The announcement also indicates that critically acclaimed Netflix original series will be available, like “Orange Is the New Black” and “House of Cards.” There is no word yet on pricing, but Netflix has built its success on its aggressively low pricing strategy. Recently, Netflix did raise prices on its streaming service by a dollar to $8.99 per month in the United States, the first price increase since 2011.
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This announcement comes on the heels of an earnings report that touted better-than-anticipated growth in international markets. Netflix had estimated adding 1.6 million internationally, but picked up 1.75 million. The company said that international customers account for 25 percent of its streaming revenue, but that percentage is expected to increase and eventually surpass the home market.
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In a letter to shareholders, Netflix wrote that international losses shrank by $22 million, with losses more than halved on a year-to-year basis due to growth in paid members. Further, the international segment was on a path to achieve profitability in 2014. That was before the latest expansion announcement, though, which should push international back into the red.
Netflix concluded its letter by noting that the company is reaching 50 million global members. That’s far shy of HBO’s 130 million global membership, though Netflix is handily beating HBO in subscribers in the domestic U.S. market. With expansion planned for such large international markets, Netflix is clearly making a run at HBO’s market dominance.
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In Germany, which boasts the fourth largest broadband user base in the world, Netflix will have to compete with Vivendi’s Watchever, a streaming service that debuted in 2013 and is already packed with American shows and movies. Plus, there’s other streaming services like Snap and MaxDome, not to mention Amazon Instant Prime, which has already launched there.
Meanwhile, in France, Vivendi’s CanalPlay is already in play, and in fact had already secured the domestic rights to Netflix’s own “House of Cards.” But Netflix is up for the unique challenges of each nation, specifying that they program differently for each country they expand into, and make quick adjustments as needed.