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Netflix (NFLX) User Base Forecast to Touch 128M by 2022

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It seems that Netflix Inc 's NFLX aggressive expansion strategy and focus on original content has paid off big time. Citing a Digital TV Research report, MarketWatch reported that the company's subscriber base could surge as much as 44% to 128 million by 2022 from 89 million at the end of 2016. Subscription revenues will increase nearly 69% to $14.9 billion compared with $8.8 billion reported in 2016.

More importantly, the report adds that the number of international subscribers will outpace domestic subscribers as early as the beginning of 2018. However, it also predicts that by 2022, the number of subscribers in North America and Western Europe combined will fall to 72% of total as compared with 81% at present, while the number of subscribers from Asia Pacific region will nearly triple to over 10 million.

In January last year, Netflix launched its service in 130 countries simultaneously, a rather impressive feat on part of the company. With the exceptions of North Korea, Syria, Iran and China, Netflix is now available in almost all countries. The company boasts nearly 100 million subscribers driven by rapid international expansion and focus on original content. In Sep 2016, CFO David Wells commented that the company plans to make 50% of its total content original over the next few years.

Netflix is also snapping up Hollywood talent to boost its movie business. Veteran Hollywood producer, Scott Stuber will spearhead its movie division from now on. The company plans to release 30 original moves in 2017.

To attract subscribers, it will offer free service in the first month. It also plans to add several regional languages to make the service more appealing. As of now, it offers content in nearly 24 languages.

In 2017, the company expects to spend over $6 billion mostly in producing original content and on licensing deals. Also, it is likely to spend an additional $1 billion on content marketing.

Netflix, Inc. Price

Netflix, Inc. Price | Netflix, Inc. Quote

More recently, to break the China Wall, Netflix entered into an agreement with Chinese search giant, Baidu Inc. Though yet to be directly accessible to Chinese people, Netflix's shows will now be available on Baidu's online video portal, iQiyi.

Zacks Rank & Stock Price Movement

At present, Netflix carries a Zacks Rank #3 (Hold). Over the past one year, Netflix shares have outperformed the Zacks categorized Broadcast Radio/TV industry. While the industry gained 65.34%, the stock saw a return of 16.05%.

Stocks to Consider

Some better-ranked stocks in the broader tech space include TiVo Corp TIVO , MercadoLibre MELI and Ollie's Bargain Outlet Holdings OLLI . While TiVo and MercadoLibre sport a Zacks Rank #1 (Strong Buy), Ollie's Bargain Outlet carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

In the trailing four quarters, TiVo, MercadoLibre and Ollie's Bargain delivered average positive earnings surprises of 67.56%, 26.74% and 14.56%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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