Netflix’s Liberty Global Deal To Help Its International Efforts
Over the past few years, Netflix (NASDAQ:NFLX) has seen runaway growth in the number of its international subscribers primarily due to the company’s rapid international expansion. However, with the service now offered in 190 countries, the company cannot realistically expect the same growth that it has seen over the last couple of years. From this point, Netflix would have to rely on increasing subscribers in existing geographies rather than getting subscribers from new markets. This is where deals such as the recent one with Liberty Global come in. Last week, the company inked an agreement with Liberty Global Plc., an international telecommunications company, to offer its content to Liberty Global’s cable customers.
Liberty Global has been associated with Netflix for some time now. The company had launched Netflix in the U.K. through its local subsidiary, Virgin Media, in 2013. The latest agreement is clearly aimed at improving Netflix’s reach in the international markets. Liberty Global has over 29 million customers across 30 countries, and availability of Netflix on their set top boxes can help the online streaming giant in multiple ways. Firstly, availability of Netflix on set top box can help bring in new subscribers. Also, it can help lower churn owing to increased convenience for Netflix’s existing subscribers. Netflix will be immediately rolled out in Liberty Global’s boxes in Netherlands and rest of the markets will get the service by the end of 2017.
Deals such as this can not only help Netflix gain more subscribers in international markets, but can also help it break even in the foreseeable future. Currently, marketing for international geographies are too high and the incoming revenue hasn’t been sufficient to generate profit. However, Liberty Media agreement can help Netflix’s marketing efforts and as well as its quest to gain subscribers, and both can go a long way in helping the company become profitable in international markets.
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