Netflix, the streaming giant with the Midas touch, is aiming its golden arrow overseas with investments of more than $1.75 billion in over 90 European productions, including original content, co-productions and licensed programming. And, Netflix promises there is more to come. This begs the question: why has Netflix invested nearly $2 billion into the European market?
Netflix has over 93 million subscribers worldwide and CEO Reed Hastings predicts that the overall subscriber base will soon exceed the 100 million mark, with half coming from international markets. Netflix has expanded into 130 countries so far.
The U.S.-based streamer has a roster of more than 90 original productions, in various stages of development, across Europe. Programming is available in 13 languages with Romanian and Greek to be added in the near future.
Europe has an amazingly diverse and rich culture and the hunger for entertainment options among the people is insatiable,” explained Paul Dergarabedian, senior media analyst at comScore. “Netflix clearly recognizes the opportunity to broaden their footprint and their brand in those countries.”
There’s also been some speculation that Netflix might have reached a saturation point in the U.S. based on the company’s latest quarterly report. Ville Salminen, owner of streaming news site Cordcutting.com and Netflix tracking site Allflicks, explained that Netflix’s growth is much slower in the U.S. compared to other countries. “At the end of Q4 2016, Netflix had 49.4 million subscribers in the U.S., whereas a year earlier the service had 44.7 million subscribers. That represents a growth of 10.5% in a single year. When we look at Netflix’s international subscriber numbers, we can see that at the end of Q4 2015 the service had 30 million international subscribers, and a year later the subscriber count had surged 47.8% to 44.4 million. Netflix’s large investments in Europe can also be seen in the size of their catalogs in different countries.”
Last year, Salminen reported that Netflix’s U.S. catalog had dwindled by a third, roughly 2,500 titles, in a two-year span. In January 2014, Netflix offered its U.S.-based subscribers 6,494 movies and 1,609 television shows, a total of 8,103 titles. By March 2016, Netflix had 4,335 movies and 1,197 television shows, a 31.7% decrease to 5,532 titles.
Salminen explained that though its U.S. catalog may be shrinking, that’s not the company’s strategy elsewhere. In April 2016, his site reported some interesting numbers overseas. For instance, Netflix’s Canadian library had grown from 3,021 television and film titles to 3,365 since January 2014. The numbers in Great Britain were somewhat similar with an increase of 254 titles since 2014 with a growth from 2,739 to 2,993 titles.
“Entertainment is a truly global phenomenon and it’s smart for Netflix to expand its scope and world view into Europe,” said Dergarabedian. “The original content that Netflix is creating has relevance and appeal the world over and much like the shift toward a more global focus on the big screen theatrical side of the business by the major studios, small screen providers likewise have a vested interest in grabbing audiences no matter where they reside on the planet.”