Netflix to Expand Globally in 2011

The fact that Neflix plans to expand internationally doesn't really come as a surprise. The company's top execs have been hinting at this for some time now and Netflix's success in the US should provide a solid launch pad for the move. It now looks like the plans are getting better defined and a launch date for several new countries is drawing closer.

According to a report by AdWeek, Netflix is talking to several advertising companies about potential launch campaigns in the countries it would start offering its service.

The talks are early stage, but could indicate that 2011 would be the year Netflix makes its big debut on the global stage. The company has come to dominate the US market first for by-mail DVD rentals and now for movie and TV show streaming.

While it's not lacking in competition, Neflix's fixed price strategy, which covers both DVD rentals and streaming, along with a solid selection of titles have made it a favorite in its home country.

Its growth has not been without compromise, though, it was forced to settle for rather restrictive distribution deals with the big Hollywood studios while paying a huge amount of money for licensing, but it seems like the strategy may be paying off in the long run.

Neflix recently launched in Canada, its first international expansion. It only offers streaming services there and the company expects its operations to be profitable within a year of launch.

Most likely, any international expansion would also be only for its streaming services. Neflix expects to generate considerable revenue from its DVD rental business, and rental numbers are actually increasing despite the popularity of the streaming service, but the company knows that streaming will win in the long run.

Most likely, an investment in the infrastructure and inventory needed for a DVD rental service in fragmented markets which are much smaller than the US would not prove as profitable for Netflix as a pure streaming service.