Netflix looks abroad for continued growth as more competitors emerge

Efforts to dethrone Netflix abroad are underway, as more money pours into upstarts looking to compete locally against the streaming giant.

Why it matters: Netflix's user base is nearing saturation in the U.S., so it needs to continue growing abroad if it ever wants a chance at profitability.

The big picture: Around the world, companies are teaming up to create rival streaming services to compete with Netflix, and are withholding their top content for their own efforts.

• Iflix, a Malaysia-based streaming video subscription service focused on Southeast Asia and the Middle East, raised over $50 million in what it refers to as pre-IPO funding, Axios' Dan Primack reports.
• BritBox — a streaming service from British broadcasters BBC, ITV and Channel 4 — is finally arriving in the U.K. for £5.99 ($7.50) a month, after first launching in North America.
• Salto, a streaming service from French broadcasters France Télévisions, M6 and TF1, launched last year to prevent French content from being at the mercy of a U.S. tech company. The broadcasters began yanking their content away from Netflix in favor of their own service in January.

Yes, but: Analysts mostly agree that the streaming giant is so far ahead of the competition that it will be tough to stop it from continuing to add subscribers overseas — even though its earnings report last week suggestedotherwise.

• Domestic competitors that will eventually look to launch overseas — like Disney+ — aren't set to launch globally for at least another year.
• In some markets, like Japan, Netflix's investments in localized content are paying off, and are beginning to eat market share.
• As The Hollywood reporter notes, several markets have seen would-be competitors try and ultimately fail to compete with Netflix.

Between the lines: Analysts don't foresee Netflix's footprint growing that much bigger in some of its biggest international markets.

• The streamer currently has roughly 150 million subscribers, with about 90 million coming from about 190 markets overseas.
• Most of its overseas subscribers are likely consolidated into a handful of bigger markets — Canada, the UK, Brazil, Japan, and Australia — and those markets aren't poised to grow that much more, says Michael Pachter, a research analyst at Wedbush Securities.

What's next: The next big battleground for Netflix is India, one of the fastest-growing streaming markets.

• The big question for Netflix will be whether it's able to capture Indian users, with a cheap, "lite" mobile versions of its app.
• "Netflix 'lite' is a land grab, pure and simple," says Pachter. "I cannot conceive that they will be profitable at $3 per month in India, but it gives them a giant head start."
• Netflix is also hoping that reduced pricing options, along with a heavier investment in localized Indian content, will lure subscribers from Amazon and Disney-owned HotStar.

The bottom line: "These localized players reflect modest and isolated competition and almost always ends up being a partner outside their home market (or core content window), says Matthew Ball, former head of strategy at Amazon Studios.

Go deeper: Netflix's reliance on big hits will be a hurdle for future growth