The U.S. firm already offers its service in the Netherlands, the United Kingdom, Ireland and Scandinavia, and Monday launched the service in France. Germany, Austria, Switzerland, Belgium and Luxembourg are in line for launches through the rest of this week.
CEO Reed Hastings said Monday that it “will be challenging to be profitable,” but “in the long term, in 5 or 10 years, we should be profitable.” Net income last quarter totaled just 5.3% of revenues, and the idea that Netflix may have to spend even more to win European customers is not an entirely welcome prospect for shareholders. The company alerted investors in July that its faster pace of international expansion could hurt profitability.
Netflix is also among the six stocks we identified Monday as being susceptible to selling off as fund managers make room in their portfolios for shares of Alibaba, which are scheduled to begin trading on Friday.
There is new competition springing up in France and Germany, and the company has also run into a snag in France related to producing new content. Netflix is also considering further expansion into Eastern and Southern Europe as soon as next year, and the company thinks it will be a global service in three to five years.
Shares were trading down about 0.8% on Tuesday, at $454.07 in a 52-week range of $282.80 to $489.29. The stock fell to $445.60 shortly after opening, so things could be worse.
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