Boston, MA 06/03/2014 (wallstreetpr) – The video streaming company Netflix, Inc. (NASDAQ:NFLX) has its sight set on big things. Although the company last week ruled out investment in streaming device business, Netflix is not ready to watch as opportunities slip away. In that case, the company has announced plans to enter six European countries this year with greater expansion plans in the continent in the next few years.
Netflix announced last week plans to take its video streaming service to Germany, France, Austria, Belgium, Luxembourg and Switzerland by the end of this year. Although the company was expected to expand into Europe this year, the six-nation expansion appears bigger than the market expected.
The six countries combined have a population that is about half of the U.S. population, and that provides an opportunity to boost revenue growth. In any case, Netflix’s expansion is aimed at supporting improved financial performance in the company especially from international operations.
Overseas Business
According to Netflix CEO, Reed Hastings, the company wants to generate 80 percent of its revenue outside of the U.S. In order to achieve that growth, Netflix, Inc. (NASDAQ:NFLX) might have to cover the whole of Europe, expand into Asia, Middle East and Latin America.
As of now, international business has been a drag on Netflix’s profit. The international streaming business contributed $274 million in loss in 2013 and $389 million loss in 2012. Although the company expects its ongoing global expansion to exert pressure on its bottom line for a few years because of the big investments, the company expects long-term benefits from its international expansion.
Hope And Concerns
As much as Netflix, Inc. (NASDAQ:NFLX) considers Europe and important market for its streaming business, stringent regulatory framework in the continent and the competition that already exists there may make it difficult for the company to achieve quick or big profits. However, for a company that has overcome many odds to establish itself as a leader in video streaming service in the U.S., Netflix appears able to live up to the challenges that its expansion in Europe might attract.
