Netflix Faces ‘More Challenging’ Global Market Entries Than in Past, S&P Says

Standard & Poor’s stands ready to upgrade its rating outlook on Netflix if the over-the-top streaming video provider “can continue its good operating momentum," despite expanding its “global footprint,” the credit-rating service said in a Thursday report. “Despite quick successes” with its rollouts in Canada and the Nordic countries, Netflix “has faced challenges with its expansion into other countries and regions,” S&P said. “We generally expect that Netflix will find future market entries more challenging than previous ones because, in addition to facing any regulatory nuances, the company won't be the industry pioneer in those new markets. We also believe that the company will be able to sign more broad-market agreements and, eventually, truly global ones.” Netflix plans to partner with SoftBank for its launch into Japan Sept. 2, it said this week (see 1508240004). Japan for Netflix “will probably be our slowest market to get to a certain penetration threshold, but it may be one of our best markets in the long term because when the Japanese society embraces a brand, it's a very deep connection, very long-term,” CEO Reed Hastings said in July (see 1507160028).