Netflix, Inc. Plans Third European Expansion In 2015, Spain In List

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Netflix, Inc. Plans Third European Expansion In 2015, Spain In List
NFLX Photo by Matt Perreault

Netflix, Inc. (NASDAQ:NFLX) would expand in Spain, in the last quarter of 2015, after marking its presence in various European territories. The online streaming company is all geared to the market, where the pay-tv performance has been sluggish.

Netflix continues European expansion

Though Netflix never opened up on why it has avoided Spain, probable reasons might be high piracy rate and lack of viewers opting for PAY-TV options.

The streaming company has extended its footprint in Canada as well as Latin America during 2010-11 and entered Europe via the UK soil in 2012 followed by Netherlands, Ireland and four Nordic countries -Denmark, Sweden, Norway and Finland. Towards the end of the year, the service will be ready to launch in Germany, France, Austria, Switzerland, Belgium and Luxembourg.

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A report from Europa Press citing sources close to the company, Netflix is targeting a third European expansion by the end of 2015, and only Spain has been revealed till date.

Despite adverse scenario, video-on-demand (VOD) and OTT platforms like Canal+’s Yomvi, Telefónica’s Movistar TV and Wuaki.tv have grown last year, in the Spanish pay-TV market.

Huge demand in Australia

Other than Spain, the company is also expected to expand in Australia. However, the road to success would not be easy in Australia, given a number of local operators. There is no announcement of the date yet, but it is expected to be in the second-half of the next year.

The producer of Orange is the new Black has a considerable fan following in Australia. To view their favorite content on Netflix, residents opt out the Geoblock sign up as they are blocked from accessing the US website. According to a survey from the Australian finance application Pocketbook, approximately one-third of the customers subscribing or renting media are using Netflix. Local competitors like Quickflix, Fetch, Ezyflix and Big Pond Movies are also trying to enhance their services and content before the arrival of Netflix.

Cantor Fitzgerald analysts have assigned Buy rating to the Netflix increasing the price target from $425 to $500 per share after the June quarter earnings report.  According to the analysts, international expansion has led to improved results alongside growing margin leverage and strong pricing power. The analysts note that the online streaming service has string of opportunities as the company is still targeting only a third of global broadband households.

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