The total number of Netflix subscribers grew 30% between 2014 and 2015 and is forecast to grow 21% in 2016 as territorial expansion reaches its peak.
By 2018, the number of international Netflix subscribers will overtake the number of its US subscribers.
This according to IHS Market report, which says the total number of Netflix subscribers grew 30% between 2014 and 2015 and is forecast to grow 21% in 2016 as territorial expansion reaches its peak.
By 2018, Netflix will break the 100 million-subscriber mark, it notes.
At the moment, Netflix has 79.9 million total paying subscribers, said Irina Kornilova, senior analyst at IHS Technology. “By 2018, international subscribers will overtake the number of subscribers in the US for the first time, and by 2020, Netflix will have 75 million international subscribers.”
IHS predicts the number of Netflix international paying subscribers will grow 38% in 2016, with more than 2.8 million of these new paying subscribers coming from the new markets that Netflix launched in at the beginning of this year.
As part of its efforts to counter slowing growth in the US, Netflix in January launched in 130 new markets, including Nigeria, bringing its total coverage to 190 countries; The company has previously said it aims to reach 200 countries by the end of 2016.
IHS expects by 2020, Netflix global revenues will reach $13 billion, with 53% accounted for by Netflix international markets.
US streaming revenues are expected to hit $6.2 billion by 2020, and international revenues to reach $7 billion.
“With the worldwide launch, Netflix has launched a platform upon which it can build and differentiate the service to fit specifics of every region in the future,” says Kornilova.
The report says at the end of 2016, Western Europe, with strong UK (over 6 million subscribers by the end of 2016), Netherlands and Nordic (5.4 million subscribers combined) markets, will be the leading region for Netflix outside the domestic US subscriber base, the report said.
Germany, despite strong competition from Amazon Prime and free TV, is expected to reach 2.2 million paying subscribers by the end of 2020.
According to Juniper Research, Netflix’s expansion has resulted in price increases, but the beneficiaries may ultimately be the provider’s rivals if the competitor price differential becomes too great.
“While Netflix has expanded its coverage globally, the test will be whether it can meet its original content production costs, as well as provide quality content to consumers,” it notes.
Netflix has been slow to invest in international content, even in larger countries, and this has stalled growth, says Jonathan Broughton, senior analyst at IHS Technology.
Local content has been cited as key to expansion in international markets and pulling back from this may be detrimental to the company outlook outside the US and UK, he adds.