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Netflix’s International Expansion

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Netflix’s International Expansion

Firstly, Netflix faces with a rising content cost which drives the company to get more subscribers. Streaming-video Company like Netflix has a big fixed cost purchasing the rights to content. Accordingly, Netflix should try to attract more customers to enjoy large economies of scale. However, building scale in new markets is a long and expensive process for Netflix. In addition, government requirement is another problem. Take France as an example, its government restricts Netflix to delay showing time three years after movies open nationally in theaters, which could reduce subscribers’ interest in the movies. Finally, Netflix has to face with multi-country competition in European countries. There are many Netflix-like companies which are more familiar with local customer preference. These companies could provide specific content to attract subscribers.

About similarities, both brick and mortar companies and internet companies face with fierce global competition, needs to increase economies of scale, and government requirements. As to difference, internet companies could enjoy a lower cost in stepping into a foreign market since it does not need to purchase new buildings or equipments. Additionally, internet companies should open business 24 hours a day and 365 days a year which means it always needs to maintain its websites. Finally, internet companies face less trade barriers than brick and mortar companies. People in most countries could freely access to internet meaning that it is hard for government to set a trade barriers. Customers resources for internet companies are much

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