On Wednesday Netflix took a giant step towards world domination (of global video streaming, that is), expanding into 130 new countries and territories. A map released by Netflix itself suggests that the only places the Netflix service is not currently available are China, Syria and the Crimean region.

Netflix: New Markets, New Challenges

New markets present new challenges. As Netflix users in Europe and the US are already painfully aware, the available offerings differ widely depending on country location. In order to achieve maximum market penetration, Netflix is going to have to work out different strategies for different regions; after all, what works in Pakistan is likely to be very different to what customers want in Peru. Accessing local content seems less likely to be an issue though; if local studios are faced with the choice of people continuing to pirate their creations or receiving a fee from Netflix in order to be able to offer their products to users, it seems fairly clear which option they’ll choose.

Netflix investors appear confident that the company’s massive expansion will pay dividends – the stock price rose by more than 10% on the day that CEO Reed Hastings made the announcement. The move shows Netflix’s desire to outrange an internationally established competitor – Amazon.

The Big Competitor - Amazon

The giant commerce company has an Amazon Video arm, which offers a movie & video streaming service. Despite Amazon’s scope of operations, when it comes to its video streaming offering the company is far more limited in its scope, with Amazon video only available in six countries. Although video streaming is clearly not the number one priority for Amazon like it is for Netflix, the business has ploughed a significant amount of money into TV programmes intended to rival Netflix’s widely hyped hit shows like ‘House of Cards’ and ‘Orange is the New Black’.

Amazon: Advantages and Drawbacks

Amazon also has an advantage over Netflix in terms of what members receive for their money. If you pay for a Netflix subscription, you receive the ability to stream Netflix movies, nothing more. However, with Amazon the ability to stream TV and movies is just a part of the larger Prime experience, including, for example, expedited delivery times for Amazon orders.

However, the same advantage that Amazon enjoys over Netflix regarding its offering in countries where it has a presence is exactly what could potentially become a drawback in new locations. Since Amazon sells ‘Prime’ as a package, to do so in a new place it would need to have all the elements of ‘Prime’ up and running, not just the video streaming part of its offering.

Netflix: The 2016 Outlook

Although Netflix stock has yet to regain the level it reached directly after Reed Hastings’ announcement, the stock is moving in that direction, indicating that traders approve of the company’s ambitious expansion strategy. Whether the company can successfully establish itself in multiple countries or whether it finds that it has expanded much faster than it can consolidate remains to be seen.