The investors are keenly watching on Netflix, Inc. (NASDAQ:NFLX) streaming subscriber growth when it announces results after trading hours Wednesday. It is indicative of how the stock will perform factoring the streaming subscribers’ growth overseas and at home.
The announcement of outlook about subscriber growth for the next quarter decides the movement of the stock completely in one direction. According to Hastings, Netflix will add 1.9 million subscribers abroad. With this, its overseas subscribers will reach 22.8 million. On the domestic front, it will add 600,000 subscribers. Therefore, its total subscriber base in the U.S. will reach 42 million.
It indicates the return of investment for the TV broadcaster – Netflix in original content amid stiff competition from rivals like Time Warner Inc (NYSE:TWX)’s HBO Now and Amazon.com, Inc. (NASDAQ:AMZN). Amazon is increasing its focus on original content with enhanced investment.
Netflix is actively introducing the services worldwide. The worldwide audience will start enjoying Netflix streaming channels by the end of 2016. The company is on track to roll out the streaming services in about 200 nations across the world by the year 2016. Reed Hastings, Chief Executive said the losses from the rollout across the world would amount to $101 million in Q2 2015.
The competition for the channel is increasing in China. If it could succeed, the combined subscriber base along with India will reach 750 million. Therefore, the increase in subscriber base indicates how widely the viewers accept the Netflix channels in the new nations across the world. The broadband penetration is still low in new nations that could pose a challenge to the content provider in the near future.
One can guess how the company performs with its big investments in countries such as Italy and Spain this fall. According to Ben Swinburne, an analyst, the viewers are spending more time watching Netflix channels when compared to other broadband networks. However, the forecasts of increasing the subscription rate on a monthly basis to $14 are still uncertain by the year 2025. The existing subscribers pay a monthly subscription of $8.
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