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Majority of Netflix subs to be outside US

By 2018, the number of international Netflix subscribers will overtake the number of US domestic subscribers, according to analysis from IHS Markit.

“At the moment, Netflix has 79.9 million total paying subscribers,” said Irina Kornilova, senior analyst at IHS Technology. “By 2018, international subscribers will over-take the number of subscribers in the US for the first time, and by 2020, Netflix will have 75 million international subscribers.”

The total number of Netflix subscribers grew 30 per cent between 2014 and 2015 and is forecast to grow 21 per cent in 2016 as territorial expansion reaches its peak, IHS Technology says.  By 2018, Netflix will break the 100 million-subscriber mark. The number of Netflix International paying subscribers will grow 38 per cent in 2016, with more than 2.8 million of these new paying subscribers coming from the new markets that Netflix launched in at the beginning of this year.

By 2020, Netflix global revenues are expected to reach $13 billion, with 53 per cent accounted for by Netflix International markets. Domestic streaming revenues are expected to hit $6.2 billion by 2020, and international revenues to reach $7 billion.

Top subscribers

At the end of 2016, unsurprisingly, says IHS Technology, Western Europe, with strong UK (over 6 million subscribers by the end of 2016), Netherlands and Nordic (5.4 million subscribers combined) markets, will be the leading region for Netflix outside the domestic US subscriber base. Germany, despite strong competition from Amazon Prime and free TV, is expected to reach 2.2 million paying subscribers by the end of 2020.

Netflix plans for localised success

The ‘soon to be localised’ markets of Poland and Turkey will drive further uptake in the Central Europe region, but the effect of the localisation will not be felt immediately, IHS Technology says.

“With the worldwide launch, Netflix has launched a platform upon which it can build and differentiate the service to fit specifics of every region in the future,” Kornilova said. “Netflix is starting this localisation process in Poland and Turkey this year. Subscribers in these countries can expect an addition of local languages to the user interface, subtitles and dubbing of content. This will help drive new subscriber numbers dramatically.”

Netflix will continue with localisation and development of new territories through 2017 and 2018. As a result, the new territories are forecast to grow their paying membership base by 133 per cent and 62 per cent in 2017 and 2018, respectively. By 2020, subscribers in countries rolled out in 2016 will represent a quarter of all international subscribers, reaching 19 million.

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