Tuesday, December 31, 2013

Impact On International Expansion Can Be Significant

According to The Motley Fool, in the first quarter of 2012, Netflix entered the U.K. and Ireland, and the quarterly international contribution loss spiked from $60 million to $103 million sequentially.  When Netflix began serving the Netherlands last quarter, it was accompanied by a sequential increase in the international contribution loss.

They go on to report:
While these numbers are "choppy," the impact of expansion on profitability is significant.
Can you still be profitable while you grow internationally?  I think so.
Netflix should not automatically shy away from international expansion just because it will be expensive. Indeed, if the company can secure a first-mover position in Internet video within its new markets, they should become quite profitable over time.
Netflix's International Expansion Will Be Expensive

No comments: