Let's place one more stamp in Netflix's (Nasdaq: NFLX ) growing passport today.
The video service provider officially rolled out its streaming platform in Sweden this morning.
The launch isn't a surprise. Netflix announced that Scandinavia would be its next international expansion market two months ago. Denmark, Finland, and Norway should follow suit later this week.
However, every market poses unique challenges and opportunities for Netflix.
In Sweden, the service isn't exactly being offered at the same $7.99 price point that stateside consumers enjoy. The monthly price of 79 Swedish kronor translates into roughly $11.81. Will it be too high for content that is thorough but not as deep as its domestic digital catalog?
Netflix also isn't alone.
Just as Netflix ran into BSkyB and Amazon.com's (Nasdaq: AMZN ) LOVEFiLM in the U.K. earlier this year, Netflix isn't exactly planting the flag in Sweden. Viaplay is already an entrenched Nordic market leader, delivering online access to TV shows, movies, and sports.
Yes, Netflix. Sports. Live athletic contests may be something that Netflix will have to look into if it wants to succeed in Scandinavia.
Netflix's arrival this month also coincides with Time Warner's (NYSE: TWX ) HBO launching as a stand-alone service in the same four countries. This is important. It's the first time the premium movie channel is making its popular content available without requiring a cable or satellite TV subscription.
Perhaps the overseas competition that Netflix has faced after easier transitions into Canada and through Latin America and the Caribbean is what's inspiring the company to move this quickly. The last thing it wants is to hit a new country where the victor has been decided before it ever had a chance to compete.
There are still a few morsels of good news here. For starters, this mid-October rollout means that Netflix should return to overall profitability by early next year. Netflix's profitability has tanked as it enters new markets, and the company already warned this summer of an outright loss during this year's fourth quarter.
Netflix is also making regional alliances to play nice with the locals. For instance, Netflix is teaming up with Sweden's Spotify to allow for free Netflix access for Spotify's premium accounts through the end of this year.
There's a world of opportunity for Netflix, but investors won't be happy until the company finds a way to expand its geographical turf without sacrificing profitability.
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