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Netflix Stock to Soar amidst Profitable International Growth Plans

Netflix, the internet movie and television streaming service is setting up shop in Cuba, amid improving diplomatic relations between Cuba and US.


Netflix Stock to Soar amidst Profitable International Growth Plans

According to Netflix, its popular shows including the House of Cards and Orange is the New Black series can be accessed by any Cuban who has an internationally recognized payment card. American Express and MasterCard are both set to launch in Cuba in the near future.

This move comes after the US announced, at the start of the year, that it would eliminate some of its fastidious sanctions that have been enforced since 1962 against the communist Cuban government.

Netflix Stocks Soaring

Netflix is embarking on an international expansion plan and is looking to launch in 200 countries in the next two years. The company also forecasts substantial profits from its global operations by 2017.

Reed Hastings, co-founder and chief executive of Netflix said, “We are happy to finally be able to launch Netflix in Cuba, connecting them with stories they will love from different parts of the world.”

The online TV streaming service saw its fourth quarter earnings perform better than was expected, causing Netflix shares to rise by 12% only hours after announcing its Q3.

In Q4 that ended December 2014, Netflix recorded a net income of $83 million compared to $48 in the same quarter a year ago.

At the same time, the online streaming service reported a burgeoning international subscription rate with up to 57.4 million subscribers globally with up to 18 million subscribers coming from outside the U.S.


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The company also added that its revenue rose to $1.48 billion, a spike of 23%. Although the company has high financial performance expectations for 2015, it is greatly aware of the stiff competition it faces from industry players including Sony and HBO. HBO is hot in its heels in the internet-streaming niche with its launch of Go Streaming Service.

As part of its expansion plans, Netflix was looking to launch in China but it is not yet clear that they will receive the necessary licensure to operate in the country.

In 2015, the internet streaming service is set to create 320 hours of returning and new series. In the last quarter of 2014, the service acquired an additional 4.33 million members in the last quarter, a spike of 260,000 more members last year.  

Netflix’s expansion plans come as its subscriber base in the U.S. slows down with only 1.9 million new subscribers coming on board in the last quarter of 2014 compared to 2.3 million new customers in the last quarter of 2013.

The company sees this as a natural decline and it noted that performance in international markets had been so impressive that they are confident of a profitable global expansion.

In markets where the internet streaming services are yet to be availed, users access content illegally. New Zealand and Australia users will now be able to officially access the services.

In 2014, Netflix raised its monthly prices to $8.99 in the U.S. and to £6.99 in the UK.

According to market analysts, this company is in a transition from domestic growth to an international type of growth.

Market Impact

In spite of stiff competition from industry giants such as Amazon and HBO, Netflix has proven its worth as a revolutionary service year on year.

The relatively new company is valued at more than $20bn and its shares have recorded impressive gains of up to 60% in the last 5 years alone. This is certainly a company investors should be on the lookout for as fortunes turn for the better in the online streaming industry.


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