International expansion is continuing apace for Netflix (NASDAQ: NFLX) as it preps for launches into South Korea, Hong Kong and Singapore. So it's not surprising to hear reports that the SVOD provider is also planning to launch service in Russia, albeit only on smart TVs for now.
The rumor was reported in an article in Izvestia, a Russian-language newspaper, which quoted an LG Electronics manager. "We hope that there will be more licensed content in Russia, and with the advent of Netflix people will start to get used to the consumer subscription model," said Vitaliy Svistunov, manager of smart TVs for LG in Russia, according to Digital TV Europe.
Netflix had not yet responded to FierceOnlineVideo's request for comment by publish time.
A launch in Russia isn't far-fetched at all, since Netflix is aiming to launch into 200 countries by the end of 2016.
Investors may be losing patience with Netflix's long-term strategy, however, which continues to impact its profits. Barron's analyst Robert Baird this week downgraded the provider's stock from Outperform to Neutral and dropped its target price from $128 to $115, citing the results of a recent U.S. subscriber survey. Prices for Netflix wobbled slightly following the report. However, Baird re-emphasized a positive outlook for the company based on its positioning and prospects for long-term growth.
Expansion is Netflix's key competitive edge at this point. In the U.S., it's facing much more pressure from Amazon, which signed three million new Prime subscribers in the second week of December alone and is luring more streaming customers by offering a $50 Kindle Fire tablet. Also, Amazon and Hulu are carving away popular content by pushing for exclusive deals with studios and networks.
To make its offering more attractive as it rolls out in new markets, Netflix has worked a variety of deals with content owners and even pay-TV operators in each country. The provider is also continuing to negotiate for global rights deals on content, which may in the long term help make content licensing easier and more cost effective.
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