Netflix, Inc. (NASDAQ:NFLX)’s vision to expand into European Countries

Netflix, Inc. (NASDAQ:NFLX)’s CEO, Reed Hastings said on Monday that the company has grown well in USA and now it is ready for international expansion. The first original program of Netflix, Inc. (NASDAQ:NFLX) was the “House of Cards”. The company announced that its membership had exceeded 50 million in the second quarter. These members include those who avail the streaming services offered by the company as well as those that used free trials. About three-quarters of its memberships come from within the United States. The company is hoping for a larger membership from across the globe in the near future.

In his telephone interview, Reed Hastings said that his company wants to bring its streaming services to people all over the world. After all, 80% usage of Internet business services lies outside United States. Over the second quarter, the company welcomed new paid subscribers, totaling 47.99 million. This is 37.4% more subscribers than those in the same quarter last year. Because of the new subscribers, the revenue generated by Netflix, Inc. (NASDAQ:NFLX) totaled $1.34 billion which was 25.3% more than the revenue generated in the previous year. Net income for the company was $71 million at $1.15 EPS, compared with the income of $29.5 million in the last year.

This is big for Netflix, Inc. (NASDAQ:NFLX). Three years ago, the company had decided to breakdown into two separate companies; one for streaming services and the other for DVD mailing. The consumers became outraged. About one million subscribers decided to cancel the services of the company and the prices of the shares fell to below $53 from $300. Netflix, Inc. (NASDAQ:NFLX) apologized to the consumers and left the plan. Since then the company has met with steady growth.

In order to attract subscribers, the company is spending resources to get original TV series and exclusive programming. These include the “House of Cards” and “Orange is the new Black”. The growth in the domestic streaming business is slowing down which explains why Netflix, Inc. (NASDAQ:NFLX) is looking to expanding its services into the international market. The company will introduce streaming services in a number of European countries and is currently offering services in 40.

The company believes that the expansion would allow them to acquire about twice as many subscribers as the current number. The consumer must be able to watch whatever he wants on demand. Netflix, Inc. (NASDAQ:NFLX) will provide such on-demand service to their subscribers over the Internet.

MoffettNathanson Research’s media analyst, Michael Nathanson, said that so far, Netflix, Inc. (NASDAQ:NFLX) has faced all kinds of challenges. Therefore, it will only seem plausible to bet that the company’s international expansion will prove successful. He also said that if we look at the past, people said a lot of things to Netflix, Inc. (NASDAQ:NFLX), and the company has proven every single one of its critics wrong.

However, expansion is not easy and free. It requires a tremendous amount of resources, especially money. Netflix, Inc. (NASDAQ:NFLX) is now increasing its prices for subscribers to generate enough revenue in order to help the expansion.