Tuesday, October 16, 2012

Netflix, Inc. (NASDAQ:NFLX) Begins Nordic Service After A Heavy Investment

The largest video subscription service provider in the world, Netflix, Inc.(NASDAQ:NFLX) began its operations in Sweden. It is its debut in the Nordic region. It has further plans of expanding its limits beyond the US.
The online services are charged at 79 kronor a month, which is equivalent to $12. The package includes TV shows and movies from Warner Bros., Twentieth Century Fox, Sony Pictures and many other content providers. The service can be enjoyed live in places like Denmark, Finland and Norway later this week, as per Reed Hastings, CEO of Los Gatos, Netflix based in California,
Netflix has been streaming videos to its US customers since 2007. It is now expanding its business in Europe as the competition intensifies and weighs hard on its home market. Its service will experience tough competition from Modern Times Group AB’s Viaplay, Time Warner’s HBO and Amazon in the Nordic regions that has a population of about 25 million people.
Hastings mentioned in an interview that the company has planned on investing heavily. It has more content this time than it ever had during a launch.
Hastings also said that in all of the markets of Netflix, it invests for the long term and does not really decides on breaking even in a new market in a span of 2 years. Usually it takes longer than 2 years since the company keeps on investing so as to get more content and build the best service possible.
Netflix also plans on expanding to Latin America, the UK and Canada. It does not expect a new region to be profitable for at least the first two years.
There is no reason why Netflix should update its forecast for a fourth quarter loss resulting due to expansion costs. Netflix usually invests about $12 billion every year on content, as per Hastings. 

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