In October of 2012, the well-known steaming television service Netflix expanded its borders even more, beginning its Nordic service, after what it considers to be heavy investment in the region.
Netflix will face significant competition in the region, because there are several other streaming services that will make Netflix’s attempt more difficult.
One significant competitor will be HBO, who has announced an expansion into Northern Europe only weeks after Netflix did. HBO’s approach will see programming being brought to Finland, Norway, Sweden and Denmark in 2012. This will be the first time that Netflix and HBO have competed for the same online customers, and it may make it a challenging time for both companies.
However, the company has attempted to compensate for this by providing more content than they have ever included in a launch before. Generally speaking, Netflix anticipates any new region to be initially unprofitable, and predicts that it will take at least two years before the venture becomes profitable. As with other expansions of its service, Netflix is planning for the long-term, aiming to obtain customers gradually, and investing in more content as time goes by.
The first step to the Nordic expansion in October was the beginning of Netflix’s operation in Sweden. Netflix has indicated that it will expand further into the Nordic region, anticipating an entry into the Scandinavian market by the end of 2012.
The expansion will not be easy for Netflix financially, and it will result in Netflix making record losses in its fourth quarter. Despite this, the expansion into new markets has the potential to increase Netflix’s profits in the future, especially if it can establish a strong customer base before other major companies, like HBO, are able to.
Netflix’s Nordic expansion is well underway, with introductions into Denmark and Norway all occurring close after the expansion into Sweden. One approach that Netflix has been using to secure customers has been content that is exclusively available on Netflix. One such example is the Finnish movie Iron Sky, which is not available anywhere else but on Netflix. This approach makes Netflix highly desirable to people who may not have considered it otherwise.
Currently, Netflix now offers its services in more than 50 different countries, and estimates that the streaming service that they offer, reaches more than 30 million people throughout the world. It will be exciting to see Netflix’s development in the future, both in terms of the regions that they serve and the content that the company has to offer.