Netflix To See Robust International Growth Per IHS Report

Netflix, Inc. (NASDAQ:NFLX) is apparently poised to gain significantly from its rapid international expansion. A report from data analytics firm, IHS Markit Ltd. (NASDAQ:INFO) predicts that by 2018, the video streaming giant’s international subscribers will outpace the number of domestic subscribers. Total subscribers are projected to cross the 100 million mark.

The report stated “By 2018, international subscribers will overtake the number of subscribers in the US for the first time, and by 2020, Netflix will have 75 million international subscribers.” This is in comparison to the company’s current subscriber base of 79.9 million.

The analyst further projected that Netflix will be raking in $13 billion in global revenues by 2020. Of this, the International markets will account for nearly 53% with approximately $7 billion in revenues. On the other hand, Netflix will generate about $6.2 billion from the U.S..

International expansion has been Netflix’s priority for some time now as it battles slowing domestic subscriber growth. At CES 2016, the company announced the launch of its services in 130 countries simultaneously, thus taking its total presence to 190 countries worldwide. The IHS report forecasts that as a result of this expansion, the company will add 2.8 million new subscribers, leading to a 38% rise in the number of international subscribers in 2016.

Netflix is also planning on localization and development of new territories, beginning with Poland and Turkey in 2016. The IHS analyst expects these new territories to result in subscriber growth of 133% and 62% in 2017 and 2018, respectively.

However, this Zacks Rank #3 (Hold) company will have to fend off stiff competition from the likes of Alphabet’s Google (NASDAQ:GOOGL) , Amazon (NASDAQ:AMZN) , Hulu and others. In addition, it has not been able to break through the China Wall owing to stringent regulations, which have proved to be an impediment.