Netflix launches in 130 new markets plus Nigeria

Netflix has launched its streaming services in 130 more countries, raising the stakes in its global battle with Amazon for supremacy in online video.

The on-demand content provider, whose popularity in the US has hit audience ratings and advertising revenues at cable and satellite channels, will now offer its services in markets including Nigeria, India, Russia, South Korea and Turkey.

Netflix’s move triples the number of markets in which it operates, and is the latest new media challenge to traditional broadcasters. Its task will be to deliver enough high-quality programming that resonates in countries where tastes vary wildly.

Reed Hastings, chief executive, said in Las Vegas it was “witnessing the birth of a new global internet TV network”. The only big market the company had yet to tap, he added, was China, “where we hope to be in the future”.

The expansion could have big implications for international broadcasters and media groups. Netflix’s on-demand streaming video service, which includes original films and television shows, such as Orange Is the New Black and Narcos, has had a profound effect on how people consume and watch media, particularly in its home market.

Netflix already has about 74m subscribers and more than half of them are in the US.

Its popularity there has been a contributing factor to “cord cutting”, where consumers shun the expense of television channels bundled with a cable or satellite subscription in favour of cheaper, on-demand alternatives offered by Netflix and rivals such as Amazon.

The number of people watching Netflix and similar internet services has hurt the financial performance of the big media companies that own cable television channels. In 2015, the S&P 500 Media index fell 5.7 per cent, far more than the broader market, which was flat for the year.

Unlike the shares of its mainstream media peers, Netflix stock rose more than 140 per cent in 2015.

On Wednesday shares in Netflix rose 9.3 per cent to $117.68, erasing losses since the start of the year on concerns about US subscriber growth. With a market capitalisation of $46bn, it is worth more than CBS and Viacom combined.

Hastings said the moment had arrived for Netflix to deliver its streaming video service to every country. “Globally, 3.2bn people are using the internet, and 2bn are from developing countries,” he said. “That’s up from 400m in 2000. This growth has been nothing short of astonishing.”

He acknowledged that running the service in so many international markets was a “big and challenging task” and pointed to the difficulties involved in securing global rights to hit shows normally sold country by country.

“Content rights are [usually] sliced and diced by territory in deals between studios and local TV networks that often last up to a decade,” he said. “Countries have differing attitudes to what content is appropriate [and] e-commerce payment systems are still developing around the world.”

Netflix was the first company to launch a mass-market video subscription service but competition has increased recently. Amazon spent $1.3bn in 2014 on original series production for its Prime instant video service and last year said it would “double down” on its investment.