Perhaps more than any other company, investors judge Netflix's (NASDAQ:NFLX) success or failure by its subscriber growth.

In the most recent quarter, the company reported more than 158 million accounts worldwide, and said it expects to close out the year with about 166 million subscribers. While its domestic growth is slowing, Netflix's most impressive growth came from international locales, which grew 33% year over year to nearly 98 million.

There remains a significant untapped global opportunity that Netflix is just beginning to harvest, and at least one analyst believes the company's strategy will enable Netflix to double its subscribers within the coming five years. Here's how the streaming giant gets there.

Seven people posing in a dimly lit room.

IMAGE SOURCE: NETFLIX.

A vast international market

Stifel analyst Scott Devitt has become increasingly bullish on Netflix since the company released its worldwide regional data in a regulatory filing last month. He believes that Netflix has already embarked on a path that will increase its penetration in important geographical locations -- namely EMEA (Europe, Middle East and Africa) and the Asia Pacific regions -- ultimately doubling its subscriber base.

According to Devitt's estimates, Netflix has reached a 55% penetration rate in North America and 39% in Latin America, the company's most mature markets. At the same time, a significant opportunity exists in EMEA and Asia Pacific, where Netflix has achieved market penetration of 19% and 11%, respectively.

Original content investment is the driver

Netflix has been spending money hand over fist to develop in-house programming, spending an estimated $15 billion on original content in 2019. 

That includes a heavy investment in non-English language content, with 300 titles debuting in 2019 alone. Devitt estimates that since 2017, Netflix has released 340 foreign language original titles in EMEA countries, 195 in Asia Pacific, and 191 in Latin America. In all, the company has developed programming in 29 different foreign languages last year, in addition to its English language originals.

Together, the EMEA, Latin America, and Asia Pacific countries represent a market opportunity of some 600 million households for Netflix. If the streaming giant were to achieve penetration rates of 62% in North America, 53% in Latin American, 41% in EMEA, and 25% in Asia Pacific, the company could reach 313 million subscribers by 2025.

A common thread

This isn't the first time an analyst has forecast a doubling of Netflix's subscribers.

In late 2018, Guggenheim Partners analyst Michael Morris made the case that the company's customer base would more than double, topping 285 million subscribers by 2023. One facet of his argument was predicated on improving broadband infrastructure and a growing population of upper-middle class smartphone users in India. In mid-2019, Netflix introduced a less expensive mobile-only plan to customers in India, and it could expand that strategy into additional low-income markets.

A man covered in blood pointing a gun at an unseen foe.

IMAGE SOURCE: NETFLIX.

In early 2018, Ark Invest went even further, making the case that Netflix could triple its subscriber base to nearly 400 million by 2023. The crux of its argument was that Netflix would ultimately hit an international penetration rate of 40% within five years. 

The common thread among all these predictions is that the tech giant's international growth is just getting started.

If only it were that simple...

While there's certainly a case that Netflix could hit these lofty subscriber goals, it's worth noting that the company isn't simply going to waltz in and be the leader. Many of the countries in the aforementioned regions took the cue from Netflix's success, and released home-grown streaming services of their own over the past several years.

Then there's the matter of big name competition like Amazon Prime Video, Disney entries Hulu and Disney+, AT&T's HBO Now, and Apple TV+. And that's not all -- within the coming months, Comcast-owned NBCUniversal has plans to release Peacock, and HBO plans to introduce an upgraded offering -- HBO Max. Each of these companies will be vying for their piece of the streaming pie, with the international market being the most logical and lucrative target.

Even as competition ramps up, Netflix has a multi-year head start and a host of foreign language programming already in place -- with more in the pipeline. If the company's success in Latin America is any indication, Netflix may well achieve these lofty benchmarks. Stay tuned.