Netflix, Inc. the largest video streaming media revealed on August 4, 2015 that it will be spreading its wings by expanding its service to the Asian Market. This decision has pushed Netflix’s stock price up for this week. Reed Hasting, CEO of Netflix had earlier stated that Japan, with its traditional and rich culture can prove to be a critical part of their strategy.
He added that soon the public of Japan will have access to the world’s largest streaming services that provides great entertainment all around the world and not only will the people of Japan be able to take advantage of its services but Netflix’s existing 57 million users will also be able to get access to new Japanese television shows and movies.
The only rival that Netflix will have in the Japanese market is Hulu, which is a company that has managed to grow to the US and Mexico. With its high original content, Netflix has been able to stretch out to Italy, New Zealand, Australia, Portugal and 50 other markets and according to Reed Hastings, the company has planned to cover over 200 more markets by the year 2017.
The company’s management earlier said in a letter to the shareholders that this global expansion extends to their content strategy and that it wants its original content to reach to millions of international viewers and gain a large audience. The reason for which Netflix has targeted Japan as its new market is that, according to CIA World Factbook, the number of broadband households in Japan is 36 million whereas internet users are over 100 million in the country which makes it the third largest market after China and the United States of America. This seems like a very good deal for Netflix to grow its market.
In the Japanese market there are quite a few other video streaming companies which include Amazon’s instant video service that was launched in 2013. Even with all the popularity that Netflix has in the United States it will have to fight for new subscribers in the new Asian Market. Netflix’s biggest rival Hulu had priced its service at $19 monthly so Netflix is expected to play the minimum price game with $10 per month for its service.
At the launch, the company has said to include Japanese movies and shows along with an instant access to exclusive shows such as Daredevil and Marco Polo. As for the investors, Hastings has said that they should not expect the market to grow as fast as it did for the U.S because it is not so easy for these people to switch brands.