Netflix Inc. becomes more focused on expanding in Europe

Netflix Inc., which operates as an Internet subscription service company and provides subscription service streaming movies and TV episodes over the Internet and sending DVDs by mail, is currently considered as a leader on the streaming-video market. As such, the company is planning an expansion in Europe, amid fierce competition between the media companies across the continent.

People with knowledge of the matter reported that the company, which is based in the U.S., has started negotiations with several Americal entertainment companies over licensing the rights to popular Hollywood content in some European countries, such as France and Germany. The company is also in talks with the French government about a possible launch until the end of 2014.

As reported by the Wall Street Journal, media and tech companies across Europe have recently been consolidating their Web-video defenses, rushing to lock in subscribers and content rights. Package services at quite reasonable prices have been becoming more and more popular in Europe these days.

In December 2013, Sky Deutschland AG, which is a German satellite operator, launched its own Netflix-like service, called Snap. The Italian broadcaster Mediaset SpA also launched a similar service, called Infinity.

More analysts share their beliefs that Europe is an irresistible target for Netflix. The fact that two of the countries with the largest broadband markets in the world – Germany and France – are located there, should not be underestimated in the opinion of market researched SNL Kagan. In addition, Western Europe as a whole had 123 million broadband homes at the end of 2013, while in the U.S. they were only 88 million.

The steaming-video services market is still developing in many European countries. SNL Kagan reports that it is now expected to grow faster in Western Europe. The expected revenue is estimated to 1.1 billion dollars in 2017, which is two-thirds more than the one for 2013.

Last week, Reed Hastings, who is the Chief Executive Officer of Netflix informed the companys investors that he is not worried by stiff local competition. Mr. Hastings said on a video webcast and was cited by the Wall Street Journal: “We can still build a very successful business. I think the key is having unique content, a great reputation, a good value proposition.”

According to CNN Money, the current share price of Netflix Inc. is 6.70% up, and its one-year return rate is 10.48% up. The 27 analysts offering 12-month price forecasts for Netflix Inc. have a median target of 360.00, with a high estimate of 460.00 and a low estimate of 122.00. The median estimate represents a -11.50% decrease from the last price of 406.77.