All has been quiet on the Netflix global front following an industry wide decrease in international investment since the 2007 financial crisis. The online media streaming and mail delivery website has been as cautious as anyone in the slow down. Hesitation has been the operative word in describing the company’s international expansion.
Netflix was founded in 1997 as a subscription-based online video rental service. In contrast to the American market leader, Blockbuster Inc., the US-based company offered at home delivery services and, eventually, began streaming capabilities seeing the trends toward digital video services. In 2010, it began its global expansion into Canada, Latin America, and the Caribbean. However, Reed Hastings, Co-Founder and CEO, has previously held reservations about entering Asia, hinting at concerns of piracy corroding market potential. In other words, the near future for Netflix in Malaysia doesn’t look good.
When asked about the viability of international markets in the San Francisco Chronicle, Hastings responded, “In certain markets, in China in particular, it looks very daunting for US companies to build a profitable business.”
Should Malaysian residents be expecting the Netflix red envelope in their mail any time soon? All signs point to no.
The reality is that Netflix relies on a country’s infrastructure and regulatory systems like few other industries must. For the company to sustain its positive brand recognition it must maintain timely delivery and consistent streaming capabilities. It took several years for the company to make the stone’s throw move to Canada which has been met with mixed results.
Another big hurdle remains the consumer market attractiveness. With the vast and unhindered underground economy of illegal movie downloads and pirated DVDs in Malaysia, the company may struggle to profitably compete.
In this case, Netflix has two options: stick to the mature markets or get creative. For a small video delivery company that only took a few years to knock out the goliath Blockbuster, one hopes it is the latter.
Would you like Netflix in Malaysia? Post comments below.
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