IHS: international Netflix subscribers to overtake US

Subscribers from the 130 countries Netflix expanded to last year account for just 5% of the streaming service’s customer base, according to new research.

Despite the slow take-up in new territories, however, the Netflix international subscriber base will overtake that of the US this year, IHS Markit data suggests.

The US-listed company launched in 50 countries between 2011 and 2016 before announcing a huge 130-country rollout last January. The number of customers in these new international territories remains a small proportion of the total, however, with analysts citing the lack of local content as the reason.

“Countries without localisation have struggled to achieve the same level of success as ones with more territory-specific offerings,” said Irina Kornilova, senior analyst at IHS Markit. “Local content is key to Netflix’s success.”

IHS issued its report on Netflix after the SVOD service’s CEO spoke at the ongoing Mobile World Congress event in Barcelona.

The analyst house said Netflix will continue to localise, but noted its growth in new countries lagged that of the ones it launched in pre-2016.

“Considering the size of the unlocked reachable audience [over 318 million broadband households], levels of growth in the new countries is much lower that Netflix has achieved in its previous expansions,” Kornilova said.

“This is due to the fact that Netflix’s initial simultaneous roll out to 130 territories happened without significant localisation features – no local or localised content and international pricing.”

This is the year, however, that international overtakes the US in terms of Netflix subs. At end-2016 the streaming service had 89 million customers in total, 54% of which were in its domestic US market.

International will edge past US this year, according to IHS, and will account for 60% of all subs by 2021. By that point customers from the 130 countries that Netflix launched in last year will account for 15% of the total, the data forecasts.