European Film

With U.S. Sales Peaking, Netflix Turns to Germany, Europe, for New Streamers

Actors Taylor Schilling and Laura Prepon attend the season two premiere of Netflix's popular "Orange is the New Black" series in New York in May. Photo: Reuters
Actresses Taylor Schilling, Laura Prepon attend a premiere of Netflix's popular "Orange is the New Black" series.
  • Why it matters

    Why it matters

    Netflix’s U.S. growth is slowing amid greater domestic competition from rivals such as Amazon, making it crucial for the company to tap into new markets in Europe.

  • Facts

    Facts

    • Netflix has 50 million subscribers in 40 countries.
    • When Germany, France and other European nations begin service this fall, the company will have access to 60 million households with high-speed Internet.
    • Competitors targeting Netflix include Internet giants Amazon and Yahoo.
  • Audio

    Audio

  • Pdf

Reed Hastings, the co-founder and chief executive officer of Los Gatos, Calif.-based Netflix, is fond of telling jokes. The American entrepreneur has good reason to be in high spirits.

His video service, which delivers compact discs via mail and directly streams films, television series and original programming into the home, just reached a record 50 million subscribers in 40 countries, even after raising prices for many of its customers.

Increasingly, the service is gaining recognition for original series such as “House of Cards,” which is based on a British series and focuses on a devious and amoral American politician, and “Orange is the New Black,” a comedy-drama set in a women’s prison.

Yet growth in the United States is slowing, which is why Mr. Hastings is staking the company’s future on expansion abroad.

Netflix will launch in Germany and France in September. Mr. Hastings makes no secret of his ambitions and promises the creativity in Europe that has defined his company’s TV programming in the United States, including a historical adventure series based on Marco Polo, which is expected to be popular overseas.

“We want to invest in French society and French content,” Mr. Reed said during an earnings conference call a few days ago. “And we want to give an avenue for French culture to get out around the world. We are already joking that instead of ‘House of Cards,’ it might be ‘House of Versailles.’”

In addition to Germany and France, Netflix will add Austria, Belgium, Luxembourg and Switzerland, which taken together will give the company access to a market of 60 million households with high-speed Internet service.

“We really see this as an enormous moment in history as on-demand Internet services are coming to the fore around the world,” Mr. Hastings said. He said Netflix’ performance in soccer-mad Brazil at the World Cup vindicated the international strategy. “What was incredible is just how straight our line of net additions was in Brazil during the World Cup,” he said.

Want to keep reading?

Subscribe today, and get access to distinguished coverage of Europe’s leading economy, from its No. 1 name in financial news: Handelsblatt.