Netflix goes global: SVOD service launches in 130 countries today, but China still MIA

LAS VEGAS -- During a packed keynote presentation here at the CES event, Netflix announced its services today are now available almost globally, in 130 countries including South Korea, India, Vietnam, Poland, Russia, Saudi Arabia, Turkey and Indonesia. "You're witnessing the birth of the global TV network," boasted Netflix CEO Reed Hastings.

However, Hastings pointedly noted that Netflix is not launching in China -- one of the few major countries where the company is not expanding its services to today. Hastings did say though that Netflix would launch in China "soon." With more than 1 billion people and a growing economy, China remains a key -- albeit difficult -- market for most of the world's Internet and technology companies.

Hastings said that Netflix now is available "how, when and wherever you are in the world."

Part of that expasion will be aided by LG. Netflix and LG announced a partnership for prepaid access to Netflix. "The partnership is likely to help adoption of Netflix in countries where credit cards are not prevalent and monthly subscriptions are not the norm," analysts with Jefferies said in a note to investors after Netflix's announcement. 

Netflix also plans to tweak its pricing slighly for each market. For example, in India the company's service plans will begin at 500 rupees (around $7.50). "We note that in certain countries such as India Netflix will need to create a significant amount of locally created and focused content," the analysts at Jefferies said.

The announcement marks a major expansion for Netflix, which Hastings said currently reaches half of all U.S. households and roughly 70 million households worldwide. He also noted that the company's streaming service has grown at a faster pace than the cable TV market did in its growth phase -- Hastings said the total number of hours Netflix streamed has grown 46 percent year over year in 2015 to 42 billion.

During the company's CES keynote presentation, Hastings and Netflix content chief Ted Sarandos boasted of Netflix's superiority over the cable and broadcast TV market. Specifically, they said Netflix is able to invest in a range of different kinds of content that existing TV services can't.

"We love stories of all sorts … We have that luxury thanks to the Internet," Sarandos said, explaining that the IP distribution model allows Netflix to distribute its shows to where people are and when they want to watch them. "[Existing] TV must aggregate a large audience at a specific time of day. Netflix doesn't need to. … That means we can spend less on marketing and still generate a high viewership," Sarandos said. "That means we can take a bigger risk."

Sarandos said cable TV has to acquire large audiences with successful shows, hitting the equivalent of an entertainment home run. Netflix, he said, can make money with smaller and more distributed audiences -- hitting the baseball equivalent of singles and doubles.

Sarandos further boasted that the streaming video approach to distributing movies and TV shows also reduces piracy because users can more easily access the content they wish to view. Specifically, he said that, following the launch of SVOD services including Netflix in Australia, piracy via BitTorrent declined 14 percent.

"Over the last 70 years, consumers have been at the mercy of others when it comes to television. The shows and movies they want to watch are subject to business models they don't understand and that they do not care about," Sarandos said. "Our job is to make it easy for consumers to find the content they love."

Sarandos and Hastings also dropped a few nuggets of news during the company's CES keynote, promising Netflix would spend up to $5 billion produce 600 hours of original content this year (that's 31 new and returning original series, two dozen original feature films and documentaries, and 30 original kids series) as well as some content using High Dynamic Range technology. Executives across the entertainment industry have trumpeted HDR technology as a major improvement to the display of content on HD and 4K TV sets.

Hastings also said Netflix employs roughly 1,000 engineers to reach those goals.

But Hastings also couched his comments with a plea to the wider telecommunications and tech industry for partnerships with Netflix -- a reference to the kinds of ISP peering deals Netflix has signed with a variety of Internet service providers to speed the delivery of its content to its subscribers.

"We have helped these companies unlock the value of smart devices," Hastings said, adding: "We're working with phone and cable companies around the world to allow customers to sign up for Netflix with one click."

Related articles:
Netflix reportedly plans to launch on smart TVs in Russia
Netflix promises to shave 20 percent from bandwidth with new approach to variable bitrate
SVOD providers Netflix, Hulu, others steamroll pay TV in content discovery ease of use, report says

Article updated Jan. 6 to include additional information.

Read more on