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Netflix’s Asian ambition faces challenges

Senior Analyst Harsh Upadhyay spoke to Digital News Asia about the challenges Netflix faces in the Asia-Pacific region. 

The availability of the Netflix service in 130 countries worldwide signals the US video-streaming company's bid to not only stay ahead of its competitors, but to also shore up its subscriber numbers and revenue.

But as Netflix Inc continues to invest heavily to expand its market share, it can expect impediments.

The challenges are several:

  • acceptance of its services in different markets
  • government regulation
  • competition from regional players and
  • lack of a consistent global catalogue of content.

In his interview with Digital News Asia, Harsh told the publication that he believes competitive pressure may not be the real threat for now.

However, he believes that Netflix is trying to mitigate against the risk of growth of alternative channels by catering to existing or latent user needs.

"In many instances, people used proxy virtual private networks (VPNs) to access Netflix, but now they have direct access," he told DNA via email.

"In 2016, Netflix's focus will be to expand its reach while maintaining low levels of margins," he added.

While Netflix’s global availability could be considered a major milestone for the company, streaming video services are not exactly new to the South-East Asian region, a point reiterated by Harsh.

"iflix and Hooq have local country-specific content, lower pricing and bundles, and existing partnerships which will help them grow, while Netflix will expand its base by catering to the wider base."

"When the market gets competitive a few years down the line, we can even expect some smaller players to be taken over by Netflix.

"Alternatively, smaller players may merge to form bigger entities [to take on Netflix]," he added.

Read the full interview on the Digital News Asia website.