Managing Director Brooke de Boutray of Zevenbergen Capital Investments says Netflix, Inc. (NASDAQ:NFLX) is expanding on its success internationally, leveraging its content investments into 130 new countries.
You may be familiar with some of their widely watched shows such as “Orange Is the New Black” or “House of Cards.” These are shows that are popular not only with U.S. subscribers but also internationally. And in January, they announced expansion into 130 new countries, essentially everywhere but China. A very large growth opportunity indeed.
Ms. de Boutray adds that while Netflix is experiencing a more competitive environment with services like Amazon Prime, it has been able to leverage costs over a growing subscriber base.
They’re definitely experiencing a more competitive environment when it comes to buying content because one of the other large buyers is Amazon. Amazon Prime Instant Video is part of Prime service. And it’s a way to add value to that $99 subscription, and Prime has become a significant revenue driver for the company. But so far, Netflix has been very successful in acquiring a large, quality library of entertainment, as well as producing original content. Content costs have risen; however, Netflix can leverage those costs over a much larger subscriber base. No one matches Netflix’s scale.
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