Can Netflix Become Must-See TV in Japan?Issue 08-31-15 |
The successful expansion by Netflix into Australia, Canada, Europe, and Latin America over the last five years has been impressive. International expansion and the first worldwide, online television network has fueled a $22.4 billion increase in Netflix’s market value since the end of 2014. About 65 percent of network subscribers are in the United States, while an additional 19 percent will come from Brazil, Canada, and the UK by yearend.
By the end of 2016, chief executive officer Reed Hastings wants to reach the rest of the globe, including more than 150 countries across Africa, Asia, Eastern Europe, and the Middle East. That push begins with Netflix’s September entry into the challenging Japanese market, where there are more broadband households than in any of its current markets outside the United States. Fewer than 30 percent of Japanese households even subscribe to pay TV, and subscription video on demand generated sales of just $450 million last year.
A smooth rollout in Japan would help calm investors’ lingering concerns about Netflix’s expansion plans. The degree of risk and difficulty there is higher than in the West, and Japan will be instructive for the company’s entry into bigger markets such as China and India.