Netflix International Business Strategic PlanCorey Sturm & Isabelle Smith

Rationale for International ExpansionSummary of Netflix

As one of the world’s leading companies in internet television, Netflix has

achieved a network of over 50 million subscribers worldwide in nearly 50 countries

across North and South America, Europe, and an upcoming launch in Australia and

New Zealand. Our goal is to provide on-demand internet television with a wide

range of movies, TV shows, and Netflix original series available on multiple internet

devices, all commercial free.

Netflix was established in 1997 in Los Gatos, California by co-founder and

CEO Reed Hastings. First, we strictly offered online movie rentals, and soon after

launched a subscription service in 1999 that delivered purchased rental movies to

the consumer by the United States Postal Service. By 2009 we grew our database

collection to over 100,000 titles on DVD and had over 10 million subscribers using

our service. In 2014, we won 7 creative Emmy Awards for our original series Orange

is the New Black and House of Cards showcasing our latest successes.

Today our over 57 million members can watch more than two billion hours of

our TV shows, movies, documentaries, Netflix original series such as House of

Cards, and feature films. As an example of our successful expansion and growth,

2003 showed 1.5 million subscribers and $100 million in revenue; and 10 years later,

we showed a drastic increase in revenue and membership by over 200%.

Expanding Internationally

In the last three months of 2014 we reported a net income of $83 million

versus $48 million just a year ago. While a majority of our subscribers (39 million

and growing) are in the United States, over 18 million are from outside the United

States. In 2014 we expanded our European operation to Germany, France, Austria,

Switzerland, Belgium, and Luxembourg in what was the biggest expansion by

number of potential subscribers in our organization’s history. Our goal is to increase

our share of the global internet TV market as we are expanding to Australia and New

Zealand in May and August of 2015 respectively.

Prospects For Future Expansion

While Australia and New Zealand are our first attempts at entering the Asian

markets, we believe there is no better time then now to continue our Asian

expansion program. Currently Asia lacks a major market of internet-TV providers,

but has a technologically advanced population that could handle these companies.

We believe that if we enter the Asian market now we can establish ourselves as the

frontrunner in internet-TV before rivals such as HBO and HOOQ gain ground. As a

globalized company we realize the massive market Asia brings, especially in South

Korea, Japan, and China.

Since our company has seen success in both domestic and international

domains, we believe further expansion into Asia will fortify the Netflix brand and

break the plateauing of membership currently happening in the United States. After

further research between South Korea, Japan, and China, we feel our best target

audience to enter Asia is in South Korea. Currently piracy in China is running

rampant as piracy rules and legislation against it is lacking, marking many TV

dramas and movies practically free for Chinese audiences who would be unwilling to

pay for what they can receive for free. Piracy is a major concern for us at Netflix, and

at the current time we feel expansion to China would be too risky. Piracy involves the

illegal download, recording, or use of movies, TV shows, and other streamable

content without exclusive rights. While Japan is a major market with a population of

well over 127 million people, with 36 million of those receiving broadband at home,

we feel cultural differences between the United States and Japan would delay a

successful launch and cost extra money up front. Our decision to enter South Korea

first is due to the large American influence on the nation and South Korea’s

broadband infrastructure that exceeds the United States; by entering South Korea,

we also will develop the ability for us to use 4K programming across the nation

making our product run smoother and be more dependable.

Business of Origin-Analysis of the Domestic Domain

Netflix has experienced success both domestically and internationally, but our

home market of the United States has been our largest customer base and most

dependable. Consumer Reports stated that 81% of those who used streaming

video services in the United States used Netflix.

SWOT Analysis of Netflix

Netflix has also been ranked as the most dependable streaming service in the

United States, which has helped us continue to increase consumer demand.

Though we have experienced a loss in Viacom content (which includes shows from

networks like MTV, Comedy Central, Nickelodeon, and VH1), we have now added

on Disney as a partner and our own original series House of Cards has been ranked

a 9/10 by IMDB making up for the loss.

A major benefit we offer is our DVD renting program, which we have used

from the beginning. The biggest advantage is that while some companies such as

HBO won’t let us stream their shows online, we do have rights to issue their series

and movies on DVD. Our popularity in the United States also comes from our $7.99

monthly subscription fee which is now cheaper than the average movie night at a

theater across the nation which sits at $8.13.

With all of our successes in our company, we do have some weaknesses that

we need to address. Our DVD subscriber base is currently at 7.51 million, which is a

loss of 475,000 subscribers from last year. We attribute this to the increase in online

subscribers as instant video is becoming more popular. Another weakness we have

is competition we face in showing movie and TV show content. In order to broadcast

our material we need to purchase the rights to do so from the companies that

developed the shows and movies. We have continually managed to be the highest

bidder, such as on our series “House of Cards”, but we don’t own the show

exclusively, and thus, run the risk of losing it.

One of our main opportunities we have at Netflix is international expansion.

We have just recently expanded further into Europe, and also plan to do so in Latin

America, South America, and Asia. The growing demand for online streaming of

video content is a global trend and we realize we have the capability to capitalize on

this early. Also, our stock is currently being sold for $414.77 a share, and with

demand growing higher for it, the opportunity to sell more stock is something we can

consider.

A major threat we face at Netflix is companies like Google and Time Warner.

Both companies are well established, and Google already owns Youtube and has

been thought to be developing their own streaming TV service. Time Warner has

been established in the TV and movie business for decades and thus owns the rights

to many shows and movies that they could bring exclusively to their own online

streaming services, such as their TWC TV app. We need to eliminate their presence

in the industry by offering a superior product globally.

Netflix’s Product

Netflix offers thousands of movies, TV episodes, and documentaries available

instantly right on your TV, iPad, phone, laptop, tablet, gaming console, and desktop

computer. Our content can be watched in High Definition and on multiple devices

simultaneously depending on the plan a customer purchases. A consumer can

purchase plans ranging from one screen, two HD screens, or 4 HD screens with

prices from $7.99-$11.99 a month. We also offer an unlimited rental DVD service

that mails both DVDs and Blu-Ray Discs to a customer’s location, without charging a

shipping fee. Our DVD plans range from 1-8 DVD’s at a time with a price between

$7.99-$43.99. Currently 51% of the United States population ages 13 to 54 watches

TV programs or movies using streaming video at least once a week. With such a

large market in the United States, we are proud to be the number one streaming

service used with 81% of American television streamers using Netflix, and we

continue to attract new customers yearly.

Netflix’s Consumers

Netflix’s consumers have the benefit of using our service both at home and on

the go; entertainment accessibility for our customers is a top priority for Netflix and

the convenience factor of our online streaming is paramount for customer

satisfaction. As of 2013 we scored a 79% approval rating among our consumers, up

5% from 2012, and in 2014 scored an 81% approval rating. Twenty- seven million

Americans over the age of 18 use the Netflix mobile app and 29% of United States

homes with televisions subscribe to Netflix. Netflix is designed to be accommodating

for all demographics and locations, and this ensures our customers’ loyalty and

continued use of our product. Our company ensures these accommodations by 24/7

IT help with Netflix connection, instant streaming with WiFi and guaranteed delivery

to anyone with a subscription and a love for entertainment.

Business of Destination-Analysis of the International Domain

SWOT Analysis

Domestically and internationally, Netflix is widely known by many Internet

users across the world; this is mainly attributed by our strong brand recognition.

Original content also bolsters brand recognition; additionally, our ability to create

original series enhances our international growth. Netflix also accounts for about

30% of Internet traffic, so our position in the virtual world is especially prominent.

This shows our product is a very convenient tool for customers’ entertainment. Since

Netflix was first Internet-connected, we have been able to develop an ecosystem for

the use of Netflix on various devices, including televisions, computers, and mobile

devices.

Although our company has many strengths overseas, we also have some

stark weaknesses, which we are constantly attempting to remedy. Despite our

significant growth in revenue, some of our current international operations are not yet

profitable. For 2013, the contribution loss from international streaming totaled $274

million. This aspect of business generated a contribution loss of $81 million in the

first nine months of 2014, and we expected a loss of $95 million for the December

period. Netflix is counteracting this by focusing on long term performance rather than

short-run profits; this strategy is effective, however, it has elements of uncertainty.

Our company originally expanded its international streaming business with

Canada in 2010 and we have established our company thoroughly across Europe

and other countries. Also, the countries in which we established Netflix services

before 2014, such as Canada, UK, Latin America, Ireland, Norse countries, and the

Netherlands, have recently become profitable on a contribution basis in Q3 2014.

With these encouraging factors, Netflix has recently broadcasted the decision to

move into Japan and eventually other parts of Asia. The opportunities in these

regions are plentiful and this new launch also sparked the goal of streaming Netflix

services to over 200 countries within the next two years. Japan, specifically, has over

36 million broadband households, which is just behind China and the US. The

country’s Internet connection speed is one of the fastest in the world and censuses

have shown only 38% of Japanese households have paid TV subscriptions. This

indicates that Pay-TV diffusion is fairly low and this setup will greatly benefit Netflix

and its opportunities in Japan. Expansion to this part of the world would not only

have a significant impact on its subscriber additions, but also its contribution

margins. After a Japanese launch, Netflix will also have the opportunity to launch in

other Asian countries with similar Internet connection speed including China and

South Korea. Our international subscriber base increased from 1.9 million customers

in 2011 to 18.3 million by the end of 2014. We believe that Netflix can cross 50

million international subscribers by the end of our forecast period if we continue on

the current expansion plans.

Some threats that Netflix faces in current international domains and future

ones include international competition and piracy issues. Since consumer preference

for watching entertainment on the web continues to grow, more international

streaming companies will transpire and cause Netflix a worldwide struggle in

competitive advantage. In Europe, Netflix will receive much competition from

Lovefilm and BSkyB. Netflix is facing the possibility of huge bidding wars with

BSkyB, especially in the UK, and this may cause content prices to skyrocket. Piracy

rates in Latin America and Asia are also very high at this time, and this discourages

potential subscribers to Netflix since they can very easily watch the same content for

free.

The internal structure of the international domains for Netflix consists of

constantly pushing for entry into a new country. The long-term effects of international

expansion, we believe is the main benefit, not instant profit. We are a very

centralized company, with many corporate alliances and footholds all over the world,

such as growing our support network with international cable companies to offer

services through their set-top boxes.

International Product and Consumer

Netflix Chief Executive recently stated in an interview with the Wall Street

Journal “The ability to click and watch and binge episodes has really resonated with

people. It has made us realize this is very likely to work on a global basis.” The

appeal of our product is apparent to all cultures around the world, easy- access

entertainment was a luxury, and now Netflix has made it a revolutionary trend. In

order to properly position our product in foreign countries, Netflix works with primary

Computer Engineers (CE) makers to get our product on the most popular devices.

For example, in Scandinavia, we worked with Samsung to ensure our product was

available in each of the 4 native languages on launch day. Also, to guarantee our

product is completely user friendly, we have international IT help services, which

include Self-Serve Common Answers (FAQs), Delayed Answers (Social Media), and

Live Answers (Live Blogs).

Our consumers are mainly in the US, and both our primary and secondary

markets consist of US target markets. Our tertiary target market, presently, are our

international streaming subscribers. This specific market includes individuals aging

25-55 years old that have access to the Internet, are middle class, graduated from

college, and have children. This market also includes parents of children who are

interested in American movies and television. This international consumer enjoys

entertainment, especially stream-able online, and the option to add subtitles or watch

in their native language. To provide our international consumers with the best

possible streaming experience, we focus on delivery of our product to markets with

deep penetration of broadband services. We also stick with our US pricing strategy,

which makes it easily affordable by the average broadband subscriber.

Ownership

One of the biggest concerns for Netflix is attaining production rights in foreign

nations. Large investment in recruiting talented executives that are well versed in the

media industry in potential foreign markets will give Netflix a political boost in

companies handing over streaming rights of a multitude of production titles that are

domestically produced. Regarding our DVD services, we also need to provide

foreign direct investment in either the vertical or horizontal strategy as to institute

distribution warehouses for Netflix’s DVD collection. By having a strong

geographical-savvy DVD Warehouse Empire, our foreign customer base that prefers

the DVD option to streaming will be satisfied.

Our company’s expansion into new markets is also characterized by the

strategic approach of “going it alone.” We do not partner with in-market companies

by forming joint ventures to share the risk, work and rewards of the launch. We are a

very independent company and want full reign of our content and position in targeted

countries. However, joint ventures by other companies have the potential to be our

biggest competitors. A joint venture between Singapore-based telecom giant Singtel

and Sony and another between Pictures Television and Time Warner’s Warner Bros.

Entertainment both are looking to launch a video streaming service similar to

Netflix’s, know as HOOQ, across Asia. HOOQ could threaten Netflix’s plans to

expand into Asia due to a well-positioned Singtel and HOOQ’s opportunities to

capitalize on the Asian video streaming market. Netflix must pierce this market

before these joint ventures are completely established in Asia; and as Asia’s Internet

penetration rate rises, the region, including Japan, South Korea and China, will

become the largest market for streaming services in the entire world.

Exportation of our product to our international customers is consistently direct

since the Internet is the simplest and cheapest way to enter a foreign market. And

with this reduction of costs, we are able to invest more into licensing content from

major production companies. The Netflix vision includes licensing the best content

including US films, foreign films and popular TV shows from suppliers across the

globe. By actively seeking out licensing in different countries, new markets are

created that allow small and large filmmakers to find global audiences.

Franchising is another great help to Netflix with their international expansions.

For example, Netflix had received worldwide distribution rights to the first season of

Gotham-the Fox Television series based on the Batman franchise. This deal Netflix

received also presents more opportunities for similar agreements via rival global

streaming services that may be at the forefront of a new era of primetime

programming.

Strategic Choices

Netflix at its core is a transnational company, due to the wholly owned

subsidiaries of Netflix all over the world. Each subsidiary reports to Netflix’s

headquarters in Los Gatos, CA. Often we like to use the quote from our hit Original

Series, House of Cards to describe how we do our transnational business: “Look at

the bigger picture.” Although this is our primary source of strategy in international

domains, we also are heading toward localizing some of our original content; this is

mostly to bolster relationships with local cable companies and Internet providers.

Here at Netflix, we are determined to provide the best customer satisfaction

worldwide; and by doing transnational and local business, we can achieve this

mission.

Expansion Target

As Netflix begins its next major expansion into the Asian market, we believe

that South Korea due to its substantial technological infrastructure, demand for

online TV, and less dramatic cultural differences makes it our best destination in

which to expand.

General Summary of South Korea

Government and Society

South Korea has a population of 49,039,986 making it the 27th largest country

by population in the world. In its population break down, 47.3% of its population is

between the age of 25-54. That age group has proven to be a major user of Netflix

domestically with over 70% of Netflix users being between 18-50 years old. South

Korea is a Republic who elects a Chief of State, known as their President, as well as

their Head of Government, known as their Prime Minister. Citizens can vote at the

age of 19 and there is universal suffrage. South Korea according to the Central

Intelligence Agency is a very homogenous society, excluding 20,000 Chinese

citizens, the rest are of South Korean origin. Currently 43.3% of the population

labels themselves as non-religious which would limit our use of our religious and

spiritual dramas we choose to air in the country.

South Korea was officially established in 1948 and stabilized after the Korean

War. In the aftermath of the war, the United States has continued to house nearly

30,000 military personnel in South Korea and during the 1980’s had over 40,000

personnel stationed there. The effect of American forces in the country has brought

in an American influence and nearly 96% of Korean kindergartens offer English, and

this continues throughout South Koreas educational structure. The positive

relationship between the Korean and United States governments has provided

strong economic growth to both nations. Ever since the end of the Korean War,

South Korea has relied on the American economy rather than its neighbor, China, as

it expands its capitalist economy. Since there are strong American values in South

Korea, we can confirm that most business culture norms are the same. This is

extremely beneficial for Netflix’s expansion to South Korea since the American

perspective is well established in this country and its people. According to Hofstede

and Hofstede’s Cultures and Organizations: Software of the Mind (2005) charts,

South Korea is substantially stronger in uncertainty avoidance, slightly more

feminine, slightly larger power distance, and substantially more collectivist than the

United States. Therefore, Netflix will need to do business with South Korea so as to

accommodate a low risk environment and decentralization upon the individual.

Economic Structure of South Korea

According to the Central Intelligence Agency, South Korea has experienced

incredible growth and global integration to become a high-tech industrialized

economy in the past four decades. We believe South Korea’s continued

advancements through the high-tech industry is a major benefit for Netflix as we

begin our plans to enter the country. Having a strong technological infrastructure is

invaluable because it will provide the highest quality streaming with little interruptions

that will keep our new South Korean customers satisfied. South Korea is the world’s

12th largest economy and its population is ranked with high disposable income; this

demonstrates the general population has the excess income to pay for a Netflix

subscription to meet their streaming demands. The broadband strength in South

Korea, due to an 83.2% urban population, is just as powerful and even more so in

major cities, such as Seoul, which guarantees a high quality Netflix experience.

Barriers on Entry to South Korea

Major concerns we have in regards to entering South Korea is the strong

presence of major world technological companies currently headquartered there.

Companies such as LG and Samsung Electronics are known for their massive

presence in the technological world as they supply a major market of mobile phones,

tablets, computers, and even appliances. These companies supply a substantial

amount of the products that our customers use to gain access to streaming Netflix.

On a governmental standpoint, due to the positive relationship between both the

United States and South Korea, we would not have to face quotas or restraints upon

entering the country. The only resources we would need in the country is the ability

for our customers to connect to the internet with a high-speed broadband, with which

South Korea is fully equipped.

Cultural Imperatives

South Koreans have proven over time that they can battle through hard times

and come out on top. After a devastating civil war, South Korea propelled itself as a

leading technological economy, a spirit that we hope to capture through movies we

will offer to our South Korean customers. According to worldbusinssculture.com

South Korea when facing hardship or adversity are masters at change and

rebuilding. South Koreans have shown that if things stop working or are not working

well they will change them and adapt very quickly and effectively. That is similar to

the work ethic in the United States, which has proven to face challenges head on.

We hope to use that as an advantage since South Korea is our first Asian expansion

point, and if we encounter troubles during our expansion we realize that South

Koreans will not look down upon changes in our company, but will instead embrace

the changes if we improve our efficiency.

A problem facing South Korea currently is increasing competition from lower

wage competitors in the region. Our concern as Netflix is knowing South Korea is a

major technological industrial society that if those plants and facilities would move to

neighboring countries such as Vietnam and Cambodia which offer cheaper labor that

the income for South Koreans would drop, subsequently decreasing the demand for

Netflix in the country.

Cultural differences between American businesses and South Korean businesses

can be drastic, as South Korea is known for its traditions and many employees work

for their own families. Respect to senior employees is a strong point and is an

important part for businesses in South Korea. While all these customs are important

to know, a benefit Netflix has is being based in California, we will not need to expand

our offices to South Korea. At Netflix though we must be aware of these differences

as we interact with our customers through customer support and understand if we

are speaking to a Korean elder that a certain amount of extra respect needs to be

administered during the conversation.

A major cultural difference between the United States and South Korea is

patience. While Americans tend to be understanding and at times apologetic, South

Koreans are known to result in negative reactions if technical details and answers

are not on hand. During communication regarding membership or problems

accessing Netflix, our staff must be aware that while Koreans tend to be restrained

and reserved in most situations, they will occasionally show flashes of extreme

emotion. A heated debate could ensue over a telephone call or an online chat, and

we must prepare as a company how to counter and eliminate these situations by

providing the upmost quality of customer support possible. Our official entry into

South Korea is projected to be smooth and profitable; this ease of entry will also

alleviate concerns of Netflix operations establishment.

Operations

Business Structure

Netflix’s organizational structure is highly functional, and is segmented based

on the aims of its functions themselves rather than organized by the consumers’

regions or segments. We are a centralized company, as CEO, Reed Hastings, has

complete control over the six departments of the company, each with individual

managers. Apart from the primary organizational flow, Netflix is not as structured

within its departments. “Context, not control” is Netflix’s motto with management and

business structure. Employees at Netflix have great autonomy and receive minimal

direction from managers. This style of organizational structure was incredibly unique

in 2002 when Netflix was becoming well established in the corporate world, and its

success has warranted little change.

Our initial expansion into Southeast Asia, with South Korea, will prove to be

uncomplicated due to the country’s respect of centralized corporate power. In South

Korean business, upper management does not give continuous instruction to

employees and only pushes for consistent, productive teamwork. The country’s

business values coincide almost synonymously with those of Netflix. Together,

Netflix and South Korea will create an efficient, productive, and sustainable work

atmosphere and provide a reliable, excellent product for South Korean subscribers.

Data Visualization

In a data driven environment such as Netflix, data visualization (dataviz) plays

a crucial role in operations. Netflix uses data-visualization tools on a continuous

basis, not occasionally like most visually based organizations. That is, Netflix

employees routinely look to existing dataviz tools to tweak algorithms, garner new

insights, and solve pressing business issues.Netflix upholds a data philosophy,

which includes the statements: (1) data should be easily discoverable and process-

able and accessible, (2) whether data is large or small, having good visualizations

makes it easier to explain, and (3) the longer it takes to find certain data, the less

valuable it becomes. Netflix’s data tools have successfully served its most valuable

assets: customers and technological professionals. However, it is still important to

remember that by successfully satisfying these two assets, Netflix’s Big Data

programs benefits everyone: executives, stockholders, nontechnical employees, etc.

Through our extensive data visualization and Big Data tools, we can deliver

seamless, extraordinary personalization for our customers. At the same time, Netflix

can easily aggregate data about customers, genres, viewing habits, trends, and

nearly anything else. Equipped with this mass of data, Netflix can attempt to answer

questions that other organizations cannot and would not ask. Our strong dataviz

networks support our optimism for Asian expansion into South Korea. The

technological power South Korea possesses will give our company an even wider

spectrum of data and better, faster ways of using it. Netflix asks the important

consumer questions and makes most business decisions based upon superior data

and dataviz tools; South Korea possesses a culture that recognizes the importance

of both.

Netflix Management Model

Netflix, in 2002, revolutionized Human Resources. We attract, retain and

manage talent through a management model derived from common sense and logic.

Netflix has noticed from its success in human resources and retention rate of

employees, that if you ask employees to rely on common sense and logic rather than

formal policy, a company will receive better results at a lower cost. Harvard Business

Review of Netflix stated, “If you’re careful to hire people who will put the company’s

interests first, who understand and support the desire for a high-performance

workplace, 97% of your employees will do the right thing.” Netflix also supports the

belief if adult like behavior and responsibility is expected among employees, then the

business culture of the company will support open conversations about issues

between managers, colleagues and subordinates. These values embody Netflix’s

most important aspect of management: to hire, reward and tolerate only fully formed

adults. Some more of these intra-business values are for managers to always tell the

truth about employee performance regardless of a resulting termination, managers

must own the job of creating extraordinary teams, leaders should own the job of

creating the company culture and good talent managers must think like business

people and innovators first, and like HR people last. We want employees to know we

mean business and we want them to do great business with us. Our current

international domains and future expansions know our reputation in the business

world and revere it. Their contributions now and in the future will continue to shape

our company and its values.

Netflix Marketing

Evolution is key to surviving in the entertainment world. As content marketers,

Netflix has been able to move away from the assemblage of entertainment and

towards creation. We understand sustaining higher quality, offering unique content

and delivering them consistently will allow us to compete with other entertainment

giants and retain and attract customers. Quality content is not just a common goal for

marketers: it is an ethos that must be adopted, both to differentiate brands in an

already cluttered marketplace and to better constitute authenticity and legitimacy

with Netflix’s audience.

Netflix has mastered the art of native advertising. We actively participate in

advertising within international domains’ television networks, magazines, roadway

adverts, etc. However, Netflix is continually adapting to the growing technologies and

partially due to our plans to expand to South Korea, an Internet capital of the world,

we are becoming more digital in our marketing. Netflix is increasingly more adept at

digital marketing, from native advertising to content discovery platforms. For

example, if our target audience is reading articles on a publisher site, we engage

them with our own articles. If they’re looking at a Facebook feed, we engage them

with a sponsored post. In each instance, the audience is interacting with our content

in the context of their normal habits. This will also hold true in our new expansion

sites in Asia, especially South Korea, as we learn more about our potential

consumers’ habits and entertainment needs.

Financing Operations

Currency exchange has been a major challenge Netflix has dealt with during

our global expansion. A concern we have during our expansion directly into South

Korea is concern the United States Treasury Department has over currency

manipulation in South Korea. While they have not labeled South Korea as a major

currency manipulator they have stated that it “has intensified its engagement with

Korea on these issues,” as the department begins their investigation. South Korea

currently uses the Won, and the number one exchange for the Won is the United

States Dollar. With the United States Dollar exchanged for the Won so frequently, it

will aid Netflix as we need to exchange the Won back to US Dollars due to

operations are funded by California in US Dollars. The Won has proven to be stable

since 1997, and even after a slight fluctuation during the 2008 financial crisis it has

rebounded well and continued to remain strong in the global currency exchange.

Projections and Conclusions

The international market in Asia presents a huge potential for Netflix. The

issues with other international domains and their poor profit margins consist of

obstacles, such as low broadband penetration and speeds, local competition and

content licensing complications. Asian domains will prove to be a great rectification

to this non profitability and with the technological superpower of South Korea (our

initial expansion site into Asia), Netflix will expect an increase of 87 million

international subscribers by 2020 and a 35% accretion in profits between 2015 and

2020. To maintain healthy stock options for our investors, we will ensure minimal

stock dips by properly forecasting competition challenges and subscriber growth in

our Asian target sites. Netflix is committed to its employees and customers, and we

conclude our expansion into Asia as the best corporate maneuver to substantially

advance our mission for accessible, stream-able and superior entertainment.