Netflix to plot more European rollouts next year

Netflix co-founder and CEO, Reed Hastings

Netflix will decide next year which European markets to expand into next, with a three-to-five year goal to expand globally, according to Netflix co-founder and CEO Reed Hastings.

Speaking on a keynote panel at the CTAM Europe EuroSummit in Copenhagen this morning, Hastings, who was in Europe to promote Netflix’s latest batch of six European country launches, compared Netflix’s growth trajectory to many traditional cable networks in its shift from licensed to original programming, and said that moving to more territories will help it to monetise and do “more original content.”

“Our pattern is for the next few months, now that we’ve just launched, we’ll spend a lot of time in France and Germany trying to learn, improve and adjust. Then we’ll decide next year to either expand more in Southern Europe, central and eastern Europe, so we’re not yet sure,” said Hastings.

“Over the next three or four years, think of us as at least trying to expand around the world.”

He said that, broadly, Netflix’s strategy was to try and break even in a new country in three to five years, and to establish itself in a third of households within seven.

“We continue to invest very heavily and are betting on future growth throughout the world in terms of membership. So we’re relatively high-leveraged, not financially, but in terms of content cost and content commitments,” he said.

Revealing some broad viewing trends, Hastings said that around two thirds of Netflix viewing is now TV series compared to and a third movies, while two thirds of viewing is done on a wide-screen television with the rest on mobiles, laptops and tablets.

He said that TV series and movies would remain Netflix’s focus, and that the firm was not interested in diversifying by moving into areas like sports, music videos, user-generated content or instructional videos.

He did however predict a wholesale industry shift in the coming years to on-demand viewing – even in live news and sports, through the use of multiple camera angles or content streams.

“Linear video that we’ve all grown up with is like the fixed-line telephone… It’s going to become an on-demand world. It will become on-demand both through straight over-the-top and through Verizon-like cloud-based interfaces where consumers can choose what and how they watch,” said Hastings.

In the past week, Netflix has launched in France, Germany, Austria, Switzerland, Belgium and Luxembourg.