When Netflix launched in 130 new countries, including South Africa, on 6 January 2016, it was due to market pressures and the need for an accelerated launch schedule.
That’s the word from the MD of World Wide Worx Arthur Goldstuck, who told MyBroadband that there were three key reasons Netflix accelerated its launch plans.
Firstly, the market has exploded with competitors and options, meaning that much of the low-hanging fruit would already be grabbed by the end of 2016.
Secondly, the longer Netflix waited, the more time competitors had to flesh out their offerings and make them comparable or better than Netflix’s.
“Already, that is an issue in markets where local players – like Showmax – have a broader and more locally-defined offering,” said Goldstuck.
Finally, its slowing growth in the USA was spooking investors, and a global roll-out ensured an acceleration in growth.
Expect material global profits from 2017
Netflix punted plans for its global expansion in January 2015, when CEO Reed Hastings told investors they planned to roll-out worldwide by the end of 2016.
“We then intend to generate material global profits from 2017 onward,” said Hastings.
Netflix reiterated this statement in its recent letter to investors, saying that its global availability sets it up for continued growth for many years.
You are witnessing the birth of a global TV network
Netflix said its growth in new markets like South Africa will unfold over many years as it improves its service.
It is starting by targeting outward‐looking, affluent consumers with credit cards (which can take US dollar charges) and smartphones.
“Today, right now, you are witnessing the birth of a global TV network. And I do mean the birth,” Hastings told Netflix press conference attendees on 6 January.
“From today onward we listen, we learn, we improve, we add more languages, more content, more ways for people to engage with Netflix.”
“Over the next several years our goal is to provide an ever-improving service.”