Netflix's Grand Ambitions for 2016

Convershaken Staff
January 5, 2016

Netflix plans to venture into 100 new markets including China, India and Indonesia in 2016 as it races to offset rising content costs with subscriber growth. The online video-streaming service - which has more than 70m subscribers across 60 countries - intends to spend around $5bn on programming this year, up from about $3.3bn in 2015.

A recent Bloomberg story highlights Netflix's plans to double its production of original content this year. It's betting that exclusive shows such as Jessica Jones, Master of None and Orange is the New Black will attract customers in droves. The platform's first talk show, a movie helmed by Brad Pitt and a reboot of Full House are all on the release slate for 2016.

Netflix is undoubtedly keen to enter China, given the nation's burgeoning middle class and position as the second-largest movie market worldwide. But it will need to secure a local partner as the Chinese government controls licensing of online content. And incumbents Baidu, Tencent and Alibaba - which owns Youku Tudou - will certainly put up a fight.

Investors have sky-high expectations - Netflix shares surged 134 per cent in 2015 to top the S&P 500 stock index - and analysts think it could amass 150m subscribers by 2020. But the company will likely have to raise prices - the service costs between $8 and $12 in the US - to finance its international expansion and content investments, which could prompt some subscribers to quit the service.

Netflix will report its fourth-quarter results in two weeks' time. Read the full Bloomberg story here.