Netflix NFLX has been increasingly investing in the production and distribution of localized, foreign-language content aimed at attracting international audiences. In third-quarter 2019, the company added 6.26 million paid international members, up 23.5% year over year.
The company is working on projects across Mexico, Spain, Italy, Germany, Brazil, France, Turkey and the entire Middle East to drive international subscriber growth. It also has a strong slate of shows for India and has rolled out a low-priced mobile plan in the country to attract more subscribers.
Strong international subscriber growth has been a major growth driver for the streaming giant. Notably, Netflix’s shares have returned 24.5% year to date compared with the industry’s rally of 28.6%.
Year To Date Performance
Netflix’s Second Original Series in Egypt
The streaming giant is set to produce an Egyptian comedy drama in collaboration with popular satirical puppet character Abla Fahita, a star in the region.
The show will be the second Egyptian original series on the streaming site, after Paranormal, a horror series based on 81-novel series Ma Waraa' Al Tabiaa by the late Ahmed Khaled Towfik that was announced in May 2019.
Netflix’s Abla Fahita series showcases the comedic character's adventures after becoming famous and how her life changes completely when she finds herself chased by law and society.
After the end of her first original show, Life in the Duplex, which was aired on an Egyptian satellite channel in 2018, this will be puppet Alba Fahita’s first opportunity to act in a scripted series.
Abla Fahita series will be released in more than 20 languages and in 190 countries in 2020. It will be produced by OKWRD Production in cooperation with ASAP Productions and executive producer Amin El Masri.
Netflix’s Focus on Arab Entertainment Market
Per DigitalTvResearch report, Netflix is expected to remain the largest SVOD platform in the Middle East and North African (MENA) regions, with 7.71 million paying subscribers by 2024, up from 3.11 million in 2018. Moreover, Netflix is expected to have 4.22 million subscribers in Arabic speaking countries by 2024.
Netflix is seeking to expand and diversify its Arabic content to adapt to local demand. It has so far commissioned the production of various originals in various Arab countries such as Al Rawabi School for Girls and Jinn in Jordan, Zinzana in the UAE and Fauda in Palestine/Israel.
Shooting of Paranormal began last month while another Middle Eastern Netflix production already aired includes Dollar set in Lebanon.
More Netflix originals from Africa are expected to premiere in 2020, including Queen Sono—the South African series starring Pearl Thusin. Queen Sono will officially premiere on Netflix on Feb 28, 2020.
In the diaspora, Angolan-Italian writer and TV host Antonio Dikele Distefano created Zero—an original for Netflix that will give viewers a glimpse of what it's like to be young and black in Italy.
Can International Content Growth Offset Competition?
Netflix plans to counter rising competition on the back of robust content portfolio and binge viewing. The streaming giant is estimated to spend $15 billion this year on content compared with $12 billion spent in 2018.
Recently, Netflix disclosed subscriber numbers and financial performance of the last three years of four geographic segments including Europe, Middle-East (EMEA) and Africa.
The report shows that as of the end of third-quarter 2019, EMEA was the second largest market for Netflix with 47.36 million subscribers. Notably, membership has increased 132% in the EMEA region since the end of third-quarter 2017.
However, Netflix has been affected by heightening competition in the streaming space. Notably, Apple AAPL launched its much-anticipated Apple TV+ on Nov 1, followed by Disney’s DIS Disney+. Other notable upcoming services include NBCUniversal’s Peacock and HBO Max.
Furthermore, Amazon AMZN has been taking initiatives to fortify presence in the global streaming space through its prime video service.
Netflix currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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