TV behemoth tackles world market
The lobby of the Netflix headquarters in California has glass display cabinets holding the 13 Emmy Awards Netflix has won for its original TV series, including Orange Is the New Black and House of Cards.
Less than 10 years ago, Netflix was just a DVD-rental business. Now it is the dominant Internet TV service, with 76 million users worldwide, more than 100 original series and films and the best return in 2015 of any stock in the S&P 500.
In the first quarter of 2016, it expects 6.1 million new subscribers. Its market capitalization has doubled since January last year to $41 billion today, closing on the entertainment behemoth Time Warner.
The streaming giant has gone fully global, launching this year in 130 new countries. Whether in Bombay, Bogota or Bangkok, you can now subscribe to and stream its content.
More than 35 per cent of subscribers, and rising, are from outside the U.S. In 2016, it is expected to spend $5 billion on content, more than twice HBO’s $2 billion. It will launch 31 new and returning original series, a wide range of comedy specials, two dozen original feature films and documentaries and 30 children’s series.
“What did you do when you didn’t watch Netflix?” asks founder and CEO Reed Hastings. “You watched cable, you watched a sports game, you killed time on Facebook. That’s what we compete with.”
Even before Netflix started making original series, its licence-only service was built on the bedrock of user data. Todd Yellin, Netflix’s head of product innovation, says a typical member logs in and scrolls through 40 titles before giving up and logging out. From the thousands of titles available, Netflix has to push up the few dozen you want to the top of your page.
“That’s why your Netflix page will look starkly different (from) your neighbour’s,” Yellin says. The goal is to figure out what to put in front of you.
The plan is not just to push U.S. entertainment worldwide. Hastings is focused on creating international programs in languages that can be subtitled and watched worldwide. Netflix has added Arabic, Korean and Chinese to the 17 scripts it already supports.