Netflix Gains On Expansion News, But Some Still Wary

On Wednesday, Netflix, Inc. (NASDAQ: NFLX) shares rose nearly 10 percent after the firm announced that it had launched streaming services in 130 new countries including key markets like Russia, India and South Korea, according to the Financial Times.

The TV streaming service has already had a positive reception in both the United States and Europe, and the expansion will triple the number of markets in which the firm operates.

The Good

Netflix's international expansion is an ambitious one. As Chief Executive Reed Hastings pointed out at the Consumer Electronics Show (CES 2016) in Las Vegas this week, the only major market the company has yet to penetrate is China. Many believe that Netflix's efforts to bring TV streaming to countries around the world put the firm above its competitors like Amazon.com, Inc. (NASDAQ: AMZN) and Hulu.

Related Link: Netflix Is Now Available Around The World

Still Some Concern

However, while Netflix's efforts to make its way around the globe are exciting, many worry that they are overambitious. Laws regarding content rights differ from country to country, and some say that the company will struggle to deliver quality content that is well received in every nation.

Not only that, but there is some concern about whether all of the countries Netflix hopes to operate in have the infrastructure to support the kinds of broadband speeds necessary for a positive streaming experience.

More To Worry About

Not only are some analysts questioning whether the hefty expansion was a smart move, but some say the firm has several other challenges coming up this year, according to Fortune. For one, the company has seen subscriber growth in the United States start to taper off, a worrisome trend as the firm is also spending more on producing original content. In order to cope with the rising costs, Netflix has had to increase the cost of its service, opening the door for competitors.

Image Credit: "Netflix headquarters" by Coolcaesar at the English language Wikipedia. Licensed under CC BY-SA 3.0 via Wikimedia Commons.