Netflix Inc. (NASDAQ: NFLX) recently disclosed a deal with Liberty Global Plc. (NASDAQ: LBTYK) in order to grow its global footprint. Under the terms of the agreement, the clients of Liberty Global will be able to access the content of Netflix via the set top boxes and remote controls. Despite this, Netflix will manage to maintain a separate billing relationship with clients.
Liberty Global Plc has over 29 million clients in about 30 countries in the Latin America, Europe, and the Caribbean. The online streaming giant’s collaboration with Liberty Global will be first rolled out in the Netherlands.
According to the CEO of Liberty Global Mr. Mike Fries, “We are committed to bringing the best content to our customers, and are thrilled to expand our partnership with Netflix.”
During the recent months, the firm has revealed a stream of collaborations with various cable operators, including one with cable giant Comcast Corp. Beginning this month, the streaming service also becomes the only place where customers will be able to view movies created by Walt Disney Company, under the deal’s terms signed back in 2012.
As it heads towards saturation levels in the domestic market, the firm is also establishing foothold and expanding at full speed. During the start of 2016, it revealed a simultaneous service expansion to 130 countries. In order to cater to all these markets, it has made significant investments in content that covers multiple borders. Take for instance, Sense8 and Narcos, involve multinational casts and locations.
Yet, the global markets of Netflix might prove to be expensive to the service. A Needham & Co. analyst stated that Britain’s vote to leave the EU in the month of June this year will negatively affect the subscription rates of Netflix in the European region. The investment firm also pointed out changes that the European Union proposed, which will require digital video service operators to make a 20 percent revenue investment into local content and spend 50 percent of their time presenting European works. The mentioned issues are only in Europe, and Netflix is also experiencing some headwinds in Asia, which range from high fees to low speeds in broadband.
The NFLX stock has also taken a hit after the online streaming giant posted consecutive quarters of lackluster financial results. In the last fiscal quarter, the multinational entertainment corporation stated that it managed to add 1.5 million subscribers internationally. This figure represents half a million below Netflix’s own estimates.
Additionally, the shares of Netflix have plunged by 15 percent in 2016 amid the deteriorating revenue and subscriber growth. The online streaming titan’s performance for the current year is in glaring contrast to that of the previous year, when it was part of the FANG grouping which led the S&P 500 index to fresh highs.
As of 9:48 AM GMT -4 on September 19, the stock of Netflix is trading at $98.22, down by 1.27 percent or 1.26 points.