Netflix, Inc. (NASDAQ:NFLX) is setting its sights on global domination as the company’s international subscribers are expected to surpass US domestic subscribers within two years. That means, Netflix is on the verge of hitting the 100 million subscribers mark before 2020, according to a new analysis from Markit Ltd.
Between 2014 to 2015, Netflix’s total number of subscribers has grown by 30%. Analysts believe that the forecast will grow to 21% in 2016 as the company’s territorial expansion reaches its peak. At the moment, Netflix boasts of 79.9 million paying customers but come 2018, the company will have 75 million global subscribers. Markit also expects Netflix’s global subscribers to grow to 38% this year, with more than 2.8 million of new paying customers coming from new markets at the start of 2016.
The report also noted that by 2020, Netflix’s global revenue would balloon to $13 billion, with international subscribers accounting for 53% of the sales. Meanwhile, the company’s domestic streaming revenues are expected to reach $6.2 billion in the same year while international revenues to reach $7 billion. So what do these huge figures mean? Within just a few short years, Netflix will have the enviable position of being able to reach a larger audience than any other distributor on the planet.
By the end of 2016, the majority of Netflix’s international subscribers will come from Western Europe, the Netherlands and Nordic markets. In the UK alone, an estimated 6 million subscribers are expected to sign up by the end of 2016. Meanwhile, the Netherlands and Nordic’s combined subscribers will peak at 5.4 million. While Amazon.com, Inc. (NASDAQ:AMZN) is dominating the German market, Netflix subscribers are expected to hit 2.2 million by the end of 2020.
The streaming service will also experience a boost in the Central Europe region thanks to “soon to be localized” Poland and Turkey markets. However, Markit noted that the effects of localization would not be felt immediately.
“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,” Irina Kornilova, senior analyst at IHS Technology (Markit) said in a statement.
“Netflix is starting this localization process in Poland and Turkey this year. Subscribers in these countries can expect an addition of local languages to the user interface, subtitles and dubbing of content. This will help drive new subscriber numbers dramatically,” Kornilova added.
According to Markit sources, the company is set to continue with its localization strategies from 2017 to 2018. And as a result, the new territories will bring in scores of subscribers, contributing to Netflix’s burgeoning paying membership base by a staggering 133 percent and 62 percent in 2017 and 2018, respectively.
As Markit noted, by 2020, Netflix’s subscribers in countries rolled out in 2016 would account for a quarter of all the service’s international subscribers, which will reach 19 million. As news of Netflix’s world domination hits, the company’s shares closed 68 cents higher at $95.26 on Monday’s regular trading session.
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