Netflix could launch outside North America next year

Video rental company Netflix may invest US$50 million (€36 million) in the second half of next year to launch services beyond North America.

In the near term, Netflix plans to extend a subscription-based streaming service already tested in Canada to the US if tests currently under way are successful, according to CEO Reed Hastings, who said that plans for expansion outside North America could follow soon after.

“Our success with our pure streaming offering in Canada at $7.99 has encouraged us to test this model in the USA. If our results are as strong as we think they will be, then we will look to start this offering later in this Q4,” said Hastings on the company’s website as the company posted strong quarterly results last week. “Pure streaming could become our core offering in the USA, and DVD would be offered as a supplement for an additional charge, like we offer Blu-ray today.  We’ll know by the holiday season if consumers would prefer this more streaming-centric approach.”

Hastings said Netflix would look to launch internationally if conditions continued to look positive. “If we continue to gain confidence in a large return on our Canadian investment, and we have confidence in the financial return on further geographic expansion, then we’ll look to grow beyond North America starting in the second half of 2011,” he said. “In that case, we would invest approximately $50 million for beyond-North-America expansion in the second half of 2011, and our addressable market would increase significantly.”

Netflix has also launched a directly downloadable user interface for services delivered via the Wii and Sony PS3 games consoles, meaning users no longer have to install a disc to begin the application.
Netflix had 16.9 million subscribers at the end of the third quarter and posted revenues of US$546 million and net income of US$38 million.