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Have Netflix Subscriptions Peaked in the U.S.? Streaming Giant Solidifies International Growth

Last Updated September 23, 2020 1:10 PM
George Chrysostomou
Last Updated September 23, 2020 1:10 PM

There’s a lot of big changes happening in the video streaming market, and competition is beginning to squeeze some of the big players.

The incoming launch of Disney Plus and the emergence of Apple TV are sure to impact other media platforms. However, the old guard of Netflix is continuing to adjust its strategy in order to not only survive but thrive in the oncoming ‘streaming wars.’

It appears that Netflix is therefore taking an international approach continue growing its subscriber base. In light of recent domestic struggles, Netflix is looking overseas to grow its recurring monthly revenue.

Netflix’s Domestic Performance

In the United States, growth has seemingly halted for the streaming giant. Indeed, it has been reported by PwC that Netflix’s domestic subscribers are about to peak . This news has come around the same time that consumers will be given a number of new alternatives to Netflix.

Not only is the platform set to peak, it’s also losing many U.S. subscribers already. In the second quarter of the year for instance, Netflix reported losing 100,000 subscribers  in its home market. That was a huge miss relative to expectations calling for a 300,000 increase. It seems that in order to continue expanding, Netflix has to shift focus.

International Content

For the same quarter, Netflix forecast an increase of 5 million international subscribers . It instead saw an increase of only 2.7 million. While this is growth nonetheless, it could be seen as concerning.

A recent article from Variety has explored some of the work that Netflix is doing in Europe . In France, for instance, the streaming service is continuing to work closely alongside both French media groups as well as those within the broader European Union. The strategy is trying to ensure that international viewers will be appealed to in some way. Pascal Breton, leader of a Paris-based media company, said “that’s the model of Netflix — they’re counting as much on the Spanish, French and British series than on the American and Korean series to attract and retain subscribers.”

They are employing a similar strategy in Latin America. Earlier in the year it was revealed that Netflix would be increasing production  in Mexico, among other places. This would include up to 50 productions that would be shot in the country using Mexican creative talent. This has been encouraged by the international success of ‘Narcos’ . The boosting of international production could increase subscriber counts with content that appeals to local audiences.

Expected Growth

Netflix stock
Shares of Netflix are trading well below their 52-week high. | Chart: Yahoo Finance

Netflix is expecting growth  to increase by 21.6% for the third quarter. Anything less could significantly affect the company’s stock. The performance of the platform is being carefully watched by investors. The stock currently sits just above $283. With the next quarterly report set to be released Oct. 16, the stock could experience renewed volatility in the short term.