Subscription video on demand provider Netflix (NASDAQ: NFLX) is continuing to find new inroads to boosting subscribership worldwide. In addition to a recent, unpromoted rise in its subscription rate for 4K programming, the company may be angling toward entry into Asia via Japan.
Netflix will announce its third-quarter earnings on Wednesday afternoon.
Sarandos (Source: Netflix)
Data analytics is increasingly driving the type of content Netflix makes available on its streaming service, as well as the way that content is presented to or discovered by viewers, Ted Sarandos, chief content owner, told attendees at a conference in Cannes.
"The way we test ourselves on it is the take rate," Sarandos said, according to a VentureBeat article reporting on the event. How often a TV show is selected, whether the viewer watches the entire series, and how high viewers rate the series using Netflix's five-star system are all part of the company's evaluation process.
Sarandos declined to comment on whether a team is being assembled in Tokyo to spearhead a launch in the Asia-Pacific region, according to Deadline Hollywood, although he did say Japan would be "a very interesting scale play" when pressed on the issue.
However, adding Japan to its current list of 50 countries would be a nice feather to add to other generally positive Netflix news this week.
Its latest Speed Index revealed that streaming speeds for its service over Verizon's last-mile network jumped 31 percent in September, landing FiOS in the No. 1 spot with an average streaming speed of 3.17 Mbps and displacing long-dominant Cablevision's Optimum service.
Netflix also announced a new interconnection deal with Bright House Networks, making the operator the fifth major ISP to which it pays fees for better access to subscribers.
The service also quietly raised the subscription rate for its 4K programming to $11.99--not a surprising move considering the additional bandwidth required to deliver Ultra High Definition (UHD) content to the comparatively few subscribers that can actually watch it.
Things are not completely hunky-dory with Netflix's international expansion, of course. While its launch in France has largely been a success, with major operators Bouyges Telecom, Orange and SFR making pacts with the service, Iliad-owned operator Free said it would not agree at this point to distribute Netflix on its system. Iliad CEO Maxime Lombardini told an audience at an early-October symposium that accepting the provider's conditions "does not seem like a good idea."
And Poland-based cable operators are also wary of Netflix's pending launch in their country. During a PIKE (Polish Chamber of Electronic Communications) conference panel in Lodz, UPC Polska's marketing director said that while the operator would like to partner with Netflix, it's concerned about the network capacity required to carry Netflix content and whether it could provide value to UPC Polska.
While it's yet another indicator that Netflix no longer has the advantage of being first to market, how much increased competition in Europe will impact its revenues is yet to be known. Investors may get their first inkling of it in Wednesday's earnings report.
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