Less than a month after Netflix (NASDAQ: NFLX) split its red-hot shares and set a new subscriber record, and just a few days past its closely-watched Japan launch, Netflix has announced that it has set its sights on several other Asian countries. The company will launch in South Korea, Singapore, Hong Kong and Taiwan in early 2016, Netflix said.
No further plans, including specific dates or content, have been announced, but Netflix's plans to make inroads to China have raised eyebrows, as that's something it can't do as a foreign company without partnering with a China-based media company. Similar speculation occurred earlier this week, as The Korea Times, citing unnamed sources, said Netflix will enter the Korean market in January 2016. The article alluded that the streaming service may partner with broadcasters and mobile carriers like SK Telecom, similar to its partnerships in the Japanese market.
In the meantime, Netflix is facing some interesting headwinds at home and abroad. A slow move into Japan is expected by the company, but analysts and investors are closely watching how well it does in this first significant Asia-Pacific marketplace.
And at least one analyst thinks the company is ripe for acquisition. Analyst Paolo Pescatore, director of Multiplay and Media at CCS Insight, is outright predicting that Netflix will be acquired by another major Web company as early as next year. "All Web players are looking for a stronger presence in paid-for video, something Netflix has achieved with remarkable success," Pescatore said. "An acquisition by a Web company would give Netflix more reach and greater stability as it expands; potential suitors include Google and Alibaba, which, given Netflix's difficulties in Asia, could form an attractive partner."
Netflix's shares are growing slowly or remaining flat on the Nasdaq, something the company hasn't struggled with in quite a long time. Analysts cited its "astronomical" P/E value of 182 early on as a reason to hesitate before buying stock in the company. But an increasing perception that its two closest rivals, Amazon (NASDAQ: AMZN) and Hulu, are beginning to bring some serious competition to bear on the content front is perhaps dampening those prices as well.
Amazon scored the most recent coup against Netflix by announcing that Prime subscribers can download Prime Instant Videos onto their devices for offline viewing. Netflix executives' response to the announcement suggests that the provider didn't give much serious thought to adding this feature: Chief Product Officer Neil Hunt told Gizmodo, for example, that offering offline viewing isn't a "compelling proposition" for viewers and that providing so much choice will add too much complexity to subscribers' lives. Meantime, Amazon will be following Netflix into Japan in September.
And Hulu has been moving forward aggressively on the content front, sweeping Epix into its fold after the network's deal with Netflix lapsed, launching a completely ad-free tier, putting together a discount deal with Showtime Anytime, and negotiating exclusive content licenses for older TV series.
Whether Netflix's future dominance of the SVOD market hinges on its success in Japan remains to be seen, but the provider appears to be shifting from a company that can't lose to one that faces interesting times.
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