Analyst: Where can Netflix seek growth?
March 17, 2022
By Chris Forrester
A report from analysts at MoffettNathanson (MN) asks what’s left in terms of growth for Netflix in its key markets?
It cites the US and Canada as an example, and says that with, Netflix being present in 64 per cent of North American broadband homes and 82 per cent of all pay-TV homes, “it is a worthy question to determine how much unit growth is left in the model”.
MN worked with Ampere Analysis on the report’s core market data and MN says its analysis suggests Netflix has tapped about half of its total potential broadband-based subscribers while barely scratching the surface of the world’s lower RPU mobile subscribers.
“Netflix still has real room to grow in the wealthier countries of Europe and Japan and South Korea, but the biggest growth opportunities are coming from less developed nations, which will in turn yield lower RPUs,” states MN.
Key to MN’s thinking is the Total Addressable Market potential for Netflix. MN quotes Netflix assessment of its potential is 700 million to 1 billion homes. MN confirms that theoretically that target number is generally correct.
MN takes a very deep dive into the planet’s markets and determines that Western Europe and the APAC regions still represent plenty of opportunity for Netflix with Central Europe, the Mid-East and Africa also worth considerable additional subs.