A recent milestone arrived for Netflix in the U.K., as the recently established service has brought in quite a few viewers. Fully 1.5 million in the region are turning to Netflix for streaming video, and the reports indicate that Netflix is actually pulling subscribers from other services in the region.
The reports suggest that it's Netflix's original content that's giving a lot of Lovefilm users—formerly the U.K.'s equivalent of Netflix—cause to switch banners from Lovefilm to Netflix. Indeed, the numbers in the U.K.—according to Enders Analysis—are on a steady upward trend, and are approaching the two million user mark as it is. Netflix doesn't release international streaming data by country, Enders Analysis' Toby Syfret notes, but there is evidence out there to suggest that the two million mark is well in sight. Indeed, not long after its launch in the U.K., Netflix offered some information on its own to say it had passed the one million user mark.
However, it's not all going Netflix's own way, according to Syfret, who further noted that there's still something of “a tightrope” for Netflix to walk, adding users, adding revenues accordingly, but still operating under “somewhat shrouded content obligations.” Of course, the original content like “House of Cards” and “Hemlock Grove” are still a pretty big deal for Netflix, but there are also some interesting deals with content providers. For instance, Netflix has a deal with AMC that lets it stream the newest episodes of “Breaking Bad” an hour after airing in the United States.
Interestingly, Netflix may also have a demographic issue of concern in the U.K., with a large portion of its customer base being both pay-TV households and younger adults, specifically, according to Syfret, “younger adults who have not yet set up more permanent households, but generally live in free-to-air TV dwellings and enjoy the occasional binge.” This poses something of a potential problem for Netflix, as such customers may be lost when the circumstances of the relevant lives involved change to match.
However, this may not be such a problem; considering that reports indicate Netflix has 7.75 million paying subscribers worldwide, with 29.75 million in the United States to boot, it's not so much a problem if the U.K. subscribers get better jobs and buy nicer houses and leave Netflix behind. It certainly doesn't hurt that, starting in 2016, Netflix will have an exclusive deal with Weinstein for all its films, giving it just a little more incentive to keep subscribers around.
Netflix is a huge value in the United States, as evidenced by its major subscriber numbers. While it's catching on in other parts of the world—a process that's a bit slower going thanks to various issues of getting content worldwide—it's looking to make its own way and bring that universal appeal that is entertainment throughout much of the world. While it's anyone's guess as yet just how far it all will go, it's certainly got the basic formula to do well.
Edited by Alisen Downey