When Netflix (NASDAQ:NFLX) announced its plans to expand into Scandinavia, the goal was simply to open up shop by "the end of 2012." With more than two months to go until popping the year-end champagne, the video maven got a jump on its new market.
The streaming video service kicked off in Sweden today, with Norway, Denmark, and Finland slated for debuts later this week. The company has been making local content deals and setting up the back-end infrastructure over the last six months, and managed to launch well before the holiday season.
Netflix will get promotional assistance from Stockholm-based music subscription service Spotify, and will advertise Spotify's services stateside in return. That's a natural pairing if I ever saw one. I can imagine the marketing messages now:
"Try Netflix -- the Spotify of movies!"
"Try Spotify -- the Netflix of music!"
The Netflix service is going up against some heavy hitters. Amazon.com (NASDAQ:AMZN) bought its way into digital movie services in Scandinavia and Time Warner (NYSE:TWX.DL) has announced a digital HBO service here that doesn't require a subscription to the premium cable channel. Moreover, Sweden is home to the infamous piracy site, The Pirate Bay, as well as numerous homegrown media services. This will be a litmus test of the Netflix value proposition. If the company can succeed against all these headwinds, it should be smooth sailing in less competitive markets.
It's good to see Netflix delivering on its promises, ahead of schedule. The company reports earnings next week, giving us an opportunity to find out whether the Nordic project runs over or under budget.
And on that note, Netflix slipped in a couple of useful data points for curious investors. Swedes were invited to join "almost 30 million" existing subscribers. That would put subscriber counts near the top end of management's guidance for the quarter. As a reminder, the global third-quarter subscriber target ranges from 28.8 million to 30.1 million total subscribers.
The market is taking in the news with a yawn, and Netflix shares still trade at a 50% discount to 52-week highs.
Fool contributor Anders Bylund owns shares of Netflix and has created a bull call spread atop his shares. Check out Anders' bio and holdings, or follow him on Twitter and Google+. The Motley Fool owns shares of Amazon.com and Netflix. Motley Fool newsletter services recommend Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.