Netflix Boosts Global Portfolio With First Philippine Series

Netflix NFLX has further expanded its push in the global video streaming market with its first Philippine series to be released on April 9.

The company collaborated with Filipino media company, TV5 Network to stream the 12-episode mini-series Amo, which is based on the controversial drug war of President Rodrigo Duterte, per media reports.

Netflix's vice president of Content Acquisition, Robert Roy, was quoted saying, "Amo is a bold and suspenseful show that has the potential of capturing thrill-seeking audiences worldwide."

International Expansion: A Key Growth Driver

Netflix's strengthening international content portfolio has been the key growth driver in recent times. The diverse content portfolio is what makes the platform so attractive to users.

We note that Netflix's expanding original content portfolio and improving penetration in international markets were the key catalysts behind its strong performance last year. Subscribers in the International Streaming segment increased 41.6% year over year to 62.83 million. Paid members were 57.83 million, up 40.4%.

The company has been progressing really well in India, Southeast Asia and Japan. Talking about the Asian markets, CEO Reed Hastings mentioned on the last conference call, "We're seeing growth penetrations that look like the first couple of years of Latin America which as you know has worked out very well for the company."

We therefore believe that in order to grow in the Asian market, which has very good prospects, the company needs to expand regional programming further.

Notably, Netflix plans to release 30 international original series this year, including programs from India, Korea and Japan. The company intends to produce/acquire 80 films throughout the year.

Netflix has set a budget of $7.5-$8 billion for production/acquisition of original content in 2018.

Although international expansion and content additions result in cost escalations in the form of technology investments and marketing expenses, it will help it to fend off competition from other content providers and help it maintain its lead, in our view.

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