The coronavirus pandemic and the associated lockdowns may have come as a major blow for many companies, but streaming giant Netflix Inc (NASDAQ:NFLX) was among the few companies which actually grew substantially. The company has grown its subscriber base in the United States and Canada at a remarkable pace. Currently, the subscriber base stands at 70 million.
Opportunity In The International Market
However, the company might have a bigger opportunity in the international market. At this point, the company has an international subscriber base of 113 million, and clearly, it can go much higher in the coming years. This presents a massive opportunity for the company and one that could propel Netflix to new heights.
Mark Mahaney, who is an analyst, is known for conducting a survey regarding Netflix and its peers ever quarter. In the latest survey, he stated that customers in international markets are more satisfied with Netflix than in North America.
Moreover, the company has recorded better penetration rates in new markets like Mexico. The company is also using its extensive data pool to create content that works in different countries. Mahaney stated that Netflix could replicate its tried and tested methods in the United States to drive subscriptions in the international markets.
The company devised a strategy of providing more value than what was being paid by consumers and in addition to that, invested big on original content. This two-pronged strategy worked well, and it could help Netflix in the international markets as well. Mahaney believes that original content in the local language can be the best strategy for Netflix. At this point, competition in the streaming space is heating up considerably, and it is no surprise that Netflix is working extensively on local language content.
Moreover, since it has a subscriber base in the United States that generates bigger margins, the company can afford to spend big to corner a major portion of the international market. Mahaney went on to state that if Netflix does manage to hit the same penetration levels in the international markets as in the United States, then it could generate earnings per share of as much as $50 per share.
