AMSTERDAM—Netflix has been a growth story for years now, but these days the company’s international aspirations are outpacing its scale in the U.S.
Maria Ferreras, vice president of business development EMEA for Netflix, spoke during the annual IBC Show about how payment integration, pay TV, and telco partnerships and content are leading the company’s international growth strategy.
Ferreras said that payment systems that accept debit cards have led to subscriber spikes in markets like the Netherlands, where she said many people prefer using cash and don’t have credit cards.
In many countries like Saudi Arabia the credit card penetration is low and some of the credit cards don’t work for ecommerce, she said. So, people who want Netflix in those markets can’t pay for it. That’s a scenario where pay TV and telco partnerships can be very valuable for Netflix.
Ferreras said that pay TV partnerships are critical for getting people easy access to Netflix without the need for additional devices. Challenges with working with pay TV operators and telcos are typically technical in nature and relate to set-top box integration.
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To a certain degree, partners have to keep up with Netflix’s pace of innovation since it is so focused on making its service as consistent as possible on all platforms. But some features like 4K and voice integration aren’t available on older set-top boxes, so Netflix makes exceptions at some points.
The mix of pay TV and telco partnerships, along with payment options and localized content, is clearly helping fuel growth for the company. In the most recent quarter, Netflix added another 4.58 million international subscribers and raised its total to 72.76 million. International streaming revenue is also ahead of domestic streaming revenue. The international business brought in $1.92 billion, as opposed to $1.89 billion in revenue from domestic streaming.
Despite the rapid rate of growth outside of the U.S., Netflix still tries to adjust its expectations from pay TV and telco partners depending on the market.
“Netflix is very good at being patient,” Ferraras said, talking about potential markets like South Africa as opposed to the short-term impact felt by deals like the company’s integration with the Sky Q platform in Europe.