Impact On International Expansion Can Be Significant

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According to The Motley Fool, in the first quarter of 2012, Netflix entered the U.K. and Ireland, and the quarterly international contribution loss spiked from $60 million to $103 million sequentially.  When Netflix began serving the Netherlands last quarter, it was accompanied by a sequential increase in the international contribution loss.

They go on to report:

While these numbers are "choppy," the impact of expansion on profitability is significant.

Can you still be profitable while you grow internationally?  I think so.

Netflix should not automatically shy away from international expansion just because it will be expensive. Indeed, if the company can secure a first-mover position in Internet video within its new markets, they should become quite profitable over time.

Netflix's International Expansion Will Be Expensive