Netflix, Inc. (NASDAQ:NFLX) has the potential to grow and become a disruptor in Europe next year, Richard Broughton, director of broadband analysis at IHS, said in an interview on CNBC.
The observation about Netflix, Inc. (NASDAQ:NFLX) comes as the company expands to Austria, Belgium, France, Germany, Luxembourg and Switzerland by the end of this year. On Thursday, IHS released a report saying that the expansion in Europe, which will begin next month, will add five to six million new subscribers to Netflix, Inc.
“We’re seeing launches later this year in a number more European markets, including France and Germany, and we’re seeing rapid growth from the markets that they’ve already launched in, so that suggests good prospects for the company in Europe,” Broughton explained in his CNBC interview.
However, for those wondering about whether Netflix, Inc. (NASDAQ:NFLX) will replace pay-TV in the markets it is launching in, the executive said that the company, at the moment, will not. He pointed out to data that his firm gathered which reveal that most subscribers to Netflix also have a subscription to cable television and other pay-TV services.
This observation agrees with a recent survey in the United States done by the Leichtman Research Group, Inc. (LRG) which revealed that 80% of Netflix subscribers also had pay-TV subscriptions. However, the data from LRG revealed that this number is on the decline as the number of Netflix subscribers who also paid for other television services were 85% in 2012 and 88% in 2010.
Meanwhile, Broughton also said that what differentiates Netflix, Inc. (NASDAQ:NFLX) from other services like it is usability. He noted that subscribers to the company’s services can use almost any connected device to view content. He also said that the offerings of other services also differ from one another which lessens competition for the companies in the industry. Furthermore, the analyst said that while the DVD industry is still a very big industry at the moment, the media will be phased out in the future and possibly replaced by services such as those offered by Netflix.
Netflix, Inc. (NASDAQ:NFLX) investors include Carl Icahn‘s Icahn Capital LP. The hedge fund reported 1.76 million shares in the company held by the end of the first half of the year.