Netflix has been making made headline after headline these days.
The streaming media company has a vast trove of popular TV shows and movies, and it's also growing its portfolio of original content. Its popularity continues to soar as it expands to new horizons, but it remains to be seen whether its strategy will pan out in the long term.
As of now, Netflix is on the rise. It just announced [pdf] that it has more than 75 million subscribers and that it expects to add another 6.1 million new subscribers during the first quarter of this year, as a result of its expansion to more global markets.
While it's true that Netflix's global expansion notably boosted its subscriber base, things may not be as rosy as they seem. Yes, Netflix has reached nearly every country worldwide, but at the same time it's also holding on to a thread when it comes to its international audience.
The launch of Netflix in 130 new countries came as great news to consumers worldwide, at least until they got the chance to see what was actually on the table. While Americans enjoy a slew of hot content on Netflix, those in other markets get a dramatically different Netflix experience. Netflix offers far more limited content in markets outside of the U.S., causing an outcry from fans whose excitement quickly turned into disappointment.
Truth be told, it's understandable why Netflix would get a surge in subscribers due to expanding to new countries, but let's not forget one very important thing. New Netflix users can enjoy a free trial month before committing to paying for the service. As soon as Netflix launched in their country, many users rushed to take advantage of that free trial, getting hyper-excited about all that binge-watching just waiting to happen, only to find that they don't really have a lot to binge-watch. Will those trial users turn into paying subscribers? Most of them will not, and there's one other major aspect that plays a great role.
Upon seeing that the content for countries outside of the U.S. is so limited, many users turned to a common workaround: using VPNs to mask their locations so they could get access to more content. Should this option continue to be available, many users would likely be willing to pay for a Netflix subscription. However, Netflix recently announced plans to crack down on VPN proxies, which will likely alienate a vast portion of its current subscriber base.
International Netflix users are raging about the VPN crackdown and a lot of them plan on cancelling their subscriptions under these conditions.
While it's understandable for Netflix to play nice with networks and show studios how it's protecting their content and respecting licensing deals by blocking VPNs, this may not please international users, on the contrary. The subscription rates are not lower for those in countries with limited content, so it's no surprise that they feel ripped off.
In conclusion, will Netflix be able to add millions of new subscribers this first quarter? Probably yes, mainly due to the novelty of hitting new markets and offering free one-month trials. Will it be able to keep all those subscribers and turn them into paying customers? Not as likely.
Just having Netflix available in a slew of countries is not enough. Making the same Netflix available to all is the real issue here. If Netflix doesn't do that, it may start bleeding customers soon.