Yahoo Finance Netflix's (NFLX) Robust International Content Aids Prospects
Netflix NFLX is keeping no stone unturned to make its international shows a hit. The company is spending heavily on content that is helping it to win international subscribers as the U.S. streaming market becomes saturated.
In third-quarter 2022, Netflix witnessed subscriber growth in international markets. The paid subscriber base for Europe, Middle East & Africa, Latin America, and the Asia Pacific increased 0.57 million, 0.31 million and 1.43 million, respectively.
Netflix’s ever-expanding foreign language content portfolio has been a major growth driver, as the company continues to face stiff competition from the likes of Disney DIS, Apple AAPL and Comcast CMCSA in the streaming space.
Netflix’s latest Japanese show, season 2 of Alice in Borderland, has become a hit, with 61.2 million hours viewed over its premiere weekend. The show debuts as the #1 on Netflix’s non-English TV show list for the Dec 19-25 week. Season 1 of Alice in Borderland trailed the latest season with 18.7 million hours viewed. Reborn Rich, with 17 million hours viewed, grabbed the #3 spot.
Expanding footprint is expected to further boost prospects. The streaming giant recently announced a couple of Danish titles, including the thriller series, The Nurse, and the feature film, A Beautiful Life, scheduled to be launched in 2023. A couple of other Danish titles to be launched include Nicolas Winding Refn’s Copenhagen Cowboy and Ehrengard, a Danish feature film directed by Bille August.
Apart from Danish language content, Netflix is expanding Korean content. Five Korean shows were launched this month, including Money Heist: Korea - Joint Economic Area Part 2 (Dec 9), Alchemy of Souls (Dec 10), Single’s Inferno Season 2 (Dec 13), The Interest of Love (Dec 21) and The Fabulous (Dec 23). It is also set to launch The Glory on Dec 30.
Netflix, Inc. Revenue (TTM)
Netflix, Inc. revenue-ttm | Netflix, Inc. Quote
Netflix’s Strong Portfolio to Aid Growth
Netflix expects to gain 4.5 million paid subscribers in fourth-quarter 2022. In third-quarter 2022, it gained 2.41 million paid subscribers globally, higher than its estimate of gaining one million users. At the end of the third quarter, this Zacks Rank #3 (Hold) company had 223.09 million paid subscribers globally. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, Netflix shares have declined 53.5% in the past year compared with the Zacks Consumer Discretionary sector’s fall of 52%. NFLX shares have also underperformed Apple, Comcast and Disney shares, which have declined 27.6%, 30.9% and 44.3%, respectively.
Netflix is suffering from waning demand, as the subscriber base dwindles amid tough competition. Netflix’s latest ad-supported service also failed to excite its user base. The ad-supported plan, launched on Nov 3, accounted for only 9% of new Netflix sign-ups in the United States during November.
Moreover, Netflix is expected to face competition in the ad-supported streaming market from the likes of Disney and Comcast.
Disney followed in the footsteps of Netflix to offer its ad-supported tier starting Dec 8, 2022. The company’s streaming service Disney+, as of Oct 1, 2022, had 164.2 million paid subscribers compared with 118.1 million as of Oct 2, 2021.
Comcast’s Peacock also offers a free-to-watch tier with ad support that has about 40,000 hours of content. Peacock is well poised to grow, owing to its vast library of IPs and new productions.
Nevertheless, Netflix is expected to continue dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content.
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